2013 (10) TMI 186 - AT - Service Tax

Admissibility of Cenvat Credit on Canteen Services (Catering Services) - Held that - Admissibility of Cenvat Credit of Canteen Services (Catering Services) goes in appellants favour - However, the aspect whether appellant had recovered any charge for the subsidized food from the Employees/ Staff/ Worker of the appellant, is required to be verified by the original adjudicating authority in view of the law laid down in the case Cadmach Machinery Company (P) Limited vs. CCE, Ahmedabad Cadmach Machiner Co. (P) Limited vs. CCE, Ahmd 2011 (8) TMI 709 - CESTAT AHMEDABAD - For the purpose of verification of this aspect, the case was remanded back to the original adjudicating authority to pass suitable order after giving an opportunity of personal hearing to the appellant. Service Tax Credit on Travel Agency (Rent-a-Cab Service) Held that - Following CCE vs. Schatt Glass India (P) Limited 2012 (11) TMI 78 - CESTAT, AHMEDABAD - CENVAT Credit benefit will be available if the service can be related to the business of manufacture As regards the service in issue it can be said that the service had a relation to the business of manufacture and had a nexus - assessee s factory was situated at a distance of 38 Kms. from Vadodara on Padra-Jambusar road at a remote place and it was a necessity to provide transportation from Vadodara to the factory and the same cannot be considered as a facility or an employee welfare activity - the Department had not made out a case for rejection of the claim.

Summary

Issues:
Admissibility of Cenvat Credit on Canteen Services and Travel Agency Services.

Canteen Services (Catering Services):
The appellant filed an appeal against the denial of cenvat credit on canteen services and travel agency services. The appellant argued that previous judgments supported the admissibility of the credit. The Tribunal noted that the admissibility of cenvat credit on canteen services was correctly argued by the appellant, citing relevant case laws. The judgment in the case of Cadmach Machinery Company vs. CCE, Ahmedabad highlighted the importance of canteen services as a statutory requirement for manufacturing operations. However, the issue of subsidized food provided to employees needed verification as per the Bombay High Court judgment in CCE Nagpur vs. Ultratech Cement Limited. The case was remanded to the original adjudicating authority for further verification.

Travel Agency Services (Rent-a-Cab Service):
Regarding the admissibility of cenvat credit on travel agency services, the appellant argued that transportation from Vadodara to the factory was a necessity due to the factory's remote location. The Tribunal referenced a previous case to support the admissibility of service tax on such services. It was noted that providing transportation was essential for the smooth functioning of the manufacturing process. The appeal with respect to cenvat credit on travel agent services was allowed, overturning the Order-in-Appeal passed by the Commissioner (Appeals), Vadodara.

Conclusion:
The Tribunal allowed the appeal concerning the admissibility of cenvat credit on both canteen services and travel agency services. The case was remanded to the original adjudicating authority for further verification regarding the subsidized food provided to employees in the context of canteen services. The judgment highlighted the importance of statutory requirements and the nexus between services provided and the business of manufacture in determining the admissibility of cenvat credit.