2016 (5) TMI 660 - HC - Service Tax

Cenvat credit - Whether the benefit of admissibility of catering service as eligible input services can only be given to the establishments employing more than 250 employees - Held that - Tribunal after relying on the decision of Bombay High Court in the case of CCE, Nagpur Vs Ultratech Cement Limited 2010 (10) TMI 13 - BOMBAY HIGH COURT and Gujarat High Court in the case of Commr. of C.Ex., Ahmedabad-I Vs Ferromatik and Milacron India Limited 2010 (4) TMI 649 - GUJARAT HIGH COURT , has held that there is no law providing for catering service to qualify as input service only if number of employees exceed 250. Therefore, there is no reason to interfere with the view taken by the Tribunal. - Decided against the revenue

Summary

Issues:
- Challenge to Tribunal's order by Revenue regarding catering services eligibility for Cenvat credit based on number of employees.

Analysis:
The High Court of Karnataka heard the appeal by the Revenue challenging the Tribunal's order dated 16-9-2013. The Tribunal had allowed the assessee's appeals and confirmed the order of remand by the Commissioner (Appeals) regarding the verification of recovery of cost from workers by the original adjudicating authority. The main issue raised was whether catering services as eligible input services could be provided to establishments employing more than 250 workers. The appellant argued that only factories with more than 250 workers, as per Section 46(1) of the Factories Act, 1948, should be entitled to Cenvat credit for catering services.

The Tribunal, citing judgments from the Bombay High Court and Gujarat High Court, held that there is no legal requirement for catering services to qualify as input services only if the number of employees exceeds 250. Based on this reasoning, the Tribunal's decision was upheld by the High Court. It was concluded that no substantial question of law arose for determination by the Court, and therefore, the appeals filed by the Revenue were dismissed.