2016 (4) TMI 371 - AT - Central Excise

Availment of Cenvat credit - Service tax paid on outdoor catering and rent a cab service - Appellant claimed that period of dispute is prior to 01.04.2011 and hence, they are eligible for credit though they have taken credit of the said services in their cenvat account during June, 2011 - Held that - the appellant has availed Cenvat credit facility on outdoor catering service provided in the factory premises to its employees and also provided rent a cab service to its employees/officers of the Company for commuting to and from the factory premises to attend to their business activities of the company. But the Revenue is of the view that outdoor catering service and rent a cab service were neither used in or in relation to the manufacture and clearance of the final products or it could be said to be an activity relating to the business. By following the ratio of decision of Hon ble Bombay High Court in the case of CCE, Nagpur Vs. Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT and decision of Hon ble Madras High Court in the case of CCE & ST, LTU, Chennai Vs. M/s. Turbo Energy Ltd. 2015 (3) TMI 632 - MADRAS HIGH COURT , the cost of input services that forms part of, the Cenvat credit availed in respect of outdoor catering service and rent a cab service is eligible as input services. - Decided in favour of appellant

Summary

Issues:
- Availment of Cenvat credit on outdoor catering and rent a cab services before 01/04/2011
- Eligibility of the appellant to claim credit on the mentioned services

Analysis:

Issue 1: Availment of Cenvat credit on outdoor catering and rent a cab services before 01/04/2011

The case involved the appellant, a manufacturer availing Cenvat credit on outdoor catering and rent a cab services. The dispute arose when a Show Cause Notice was issued questioning the eligibility of the appellant to claim Cenvat credit on service tax paid for these services. The adjudicating authority confirmed the demand for recovery of ineligible credit along with interest and imposed a penalty. On appeal, the Ld. Commissioner (Appeals) sustained the demand with interest but set aside the penalty. The appellant then appealed to the Tribunal challenging the order of the Commissioner (Appeals).

Issue 2: Eligibility of the appellant to claim credit on the mentioned services

The appellant contended that they were eligible to take credit on outdoor catering and rent a cab services based on the necessity of catering facilities under the Factories Act, 1948, and the use of rent a cab service for the transportation of employees. The appellant argued that the impugned services were consumed in relation to their business activities, and relied on a Board's Circular clarifying the availability of credit on services received before 01/04/2011. The appellant cited various citations to support their argument.

The Ld. AR representing the Revenue reiterated the findings of the Order-in-Original and the Order-in-Appeal, stating that the credit availed on rent a cab and outdoor catering services was not in order. However, after hearing both sides and examining the records, the Tribunal found that the issue revolved around the Cenvat credit on outdoor catering and rent a cab services availed before 01/04/2011. The Tribunal referred to relevant case laws, including decisions by the Hon'ble Bombay High Court and the Hon'ble High Court of Madras, to support its decision.

In conclusion, the Tribunal, following the precedent set by the jurisdictional High Court, held that the Cenvat credit availed on outdoor catering service and rent a cab service was eligible as input services. Therefore, the appeal was allowed in favor of the appellant.