2015 (9) TMI 1275 - AT - Service Tax

Admissibility of CENVAT Credit - Service Tax paid on Outdoor Catering Services - Held that - So far as the admissibility of CENVAT Credit on Outdoor Catering Services is concerned, the issue is already settled by Hon ble Mumbai High Court in the case of CCE Nagpur Vs Ultratech Cement Ltd (2010 (10) TMI 13 - BOMBAY HIGH COURT) and the jurisdictional High Court in the case of CCE Ahmedabad-I Vs Ferromatik Milacron India Ltd (2013 (8) TMI 77 - GUJARAT HIGH COURT). However, the credit with respect to the cost recovered from the employees of the Appellant will not be admissible as per law laid down by Hon ble Bombay High Court in the case of CCE Nagpur Vs Ultratech Cement Ltd (supra). Appellant has not disputed reversal of such Service Tax portion which is not eligible as per the law laid down by Hon ble Bombay High Court. Appeal filed by the appellant to that extent is dis-allowed. So far as the factory of the Appellant having less than 250 workmen is concerned, the Administrator Daman and Diu, Dadra and Nagar Haveli has certified that Appellant situated at Silvassa has more than 250 workmen. The Appellant is maintaining one canteen with respect to their factories situated in Silvassa at the premises of this unit. When the competent authority has given certificate to the Appellant regarding number of employees working in the canteen of the Appellant, there is no reason to deny credit in the absence of another contrary opinion expressed by another competent authority. Therefore, the order passed by the First Appellate Authority is required to be rejected - Decided against assessee.

Summary

Issues: Admissibility of CENVAT Credit on Outdoor Catering Services; Number of employees in the factory.

Analysis:

1. Admissibility of CENVAT Credit on Outdoor Catering Services:
The appeal was filed concerning the admissibility of CENVAT Credit of Service Tax paid on Outdoor Catering Services by the Appellant. The Appellant's advocate referred to legal precedents, including judgments from the Hon'ble Mumbai High Court and the Hon'ble Gujarat High Court, to support their argument. They contended that the First Appellate Authority had denied the credit based on the number of employees in the factory, which they disputed with a certification from the Administration of Daman and Diu, Dadra and Nagar Haveli Office. The Appellant agreed to reverse proportionate credit as per the Mumbai High Court's decision in a related case. The Revenue's representative argued against the admissibility of CENVAT Credit based on a judgment from CCE Chennai. The Tribunal, after hearing both sides, held that the issue of admissibility of CENVAT Credit on Outdoor Catering Services was settled by previous court decisions. However, the credit for the cost recovered from the employees was deemed inadmissible as per the law laid down by the Hon'ble Bombay High Court. The Appellant did not contest this portion, and the appeal on this aspect was disallowed.

2. Number of employees in the factory:
Regarding the number of employees in the factory, the Administrator of Daman and Diu, Dadra and Nagar Haveli certified that the Appellant's unit in Silvassa had more than 250 workmen. The Appellant operated a single canteen for all its units in Silvassa. The Tribunal noted that when a competent authority had provided certification regarding the number of employees, there was no justification to deny the credit without a contrary opinion from another competent authority. Therefore, the Tribunal rejected the order passed by the First Appellate Authority and disallowed the appeal only to the extent related to this issue.