2009 (8) TMI 399 - AT - Service Tax

Cenvat Credit- Input Services- The assessee had a canteen inside its factory premises. It availed Cenvat Credit of service tax paid on outdoor catering services employed in factory availed in that canteen. Lower authorities disallowed said credit. In the light of the decision held that outdoor catering services employed in factory canteen is an input service. Thus the impugned order is liable to set-aside.

Summary

Issues:
1. Stay petitions for waiver of pre-deposit of duty amount and penalties.
2. Appeal against denial of Cenvat credit on Outdoor Caterer Services.

Analysis:
1. The stay petitions were filed seeking waiver of pre-deposit of duty amount and penalties imposed on the applicants. The judicial member found that the appeals themselves could be disposed of at that stage. The appeals were preferred against the order of the Commissioner (Appeals) upholding the denial of Cenvat credit availed by the appellants on Outdoor Caterer Services. The appellants had availed Cenvat credit based on Canteen Bills of Outdoor Caterer Services where Service Tax was charged. The show-cause notice alleged contravention of Cenvat Credit Rules, 2004, invoking provisions under the Central Excise Act. The appellants contended that their case was covered by a Larger Bench's decision, but the Commissioner (Appeals) disagreed, leading to the appeals.

2. During the hearing, the learned Advocate for the appellants argued that their case was squarely covered by the Larger Bench's decision and cited a Tribunal case supporting the classification of Outdoor Catering Services as an input service. The learned SDR reiterated the impugned order. After considering the facts, circumstances, and the arguments presented, the judicial member concluded that the appellants' cases were indeed covered by the decisions cited by the appellants' Advocate. Consequently, the impugned order was set aside, and the appeals were allowed with any consequential relief.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both sides, the legal basis for the decision, and the final outcome in favor of the appellants based on the legal precedents cited.