2012 (11) TMI 33 - AT - Service Tax

CENVAT credit of service tax paid - Out-door Catering Services - Held that - As decided in CCE, Nagpur Versus Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT that the service tax paid on outdoor catering services by the canteen located in the respondent s manufacturing premises has to be considered as an input service relating to business and that CENVAT credit is admissible in respect of the same. Thus the appellant is eligible for the benefit of service tax credit proportionate to the actual amount spent - matter is remanded back to original adjudicating authority for a limited purpose of verifying as to whether appellants have recovered any amount from the employees towards the catering services - in favour of assessee.

Summary

Issues Involved: Eligibility of credit of service tax paid on Out-door Catering Services

Analysis:
The issue involved in this judgment is the eligibility of credit of service tax paid on Out-door Catering Services. The appellant had submitted written submissions citing decisions from the Hon'ble Gujarat High Court and the Hon'ble Bombay High Court to support their claim for the benefit of credit. The learned departmental representative also presented arguments, emphasizing the need to verify whether the appellant had recovered any amount from employees for providing catering services.

The Tribunal considered the submissions and written arguments. It noted that the appellant is indeed eligible for the benefit of credit based on the decision of the Hon'ble Gujarat High Court in the case of Ferromatic Milacron India Limited. The Tribunal highlighted that the service tax paid on outdoor catering services by the canteen located in the appellant's manufacturing premises should be considered as an input service related to business, making CENVAT credit admissible. The Tribunal dismissed the appeal, affirming that the view taken by the Tribunal aligns with the Rules and does not have any legal infirmity.

Additionally, the Tribunal referenced the decision of the Hon'ble Bombay High Court in the case of Ultratech Cement Limited, further supporting the appellant's eligibility for the benefit of service tax credit. It was clarified that the appellant could claim credit proportionate to the actual amount spent by them, with full credit available if no amount was recovered from employees for catering services.

Consequently, the impugned order was set aside, and the matter was remanded back to the original adjudicating authority for the specific purpose of verifying whether the appellants had recovered any amount from employees for catering services. The Tribunal emphasized that the appellant must be given a reasonable opportunity to present their case before any adverse decision is made.