2017 (3) TMI 501 - AT - Central Excise

CENVAT credit - outdoor catering services - appellant is recovering 50% of the element of the basic value from the worker only and not the service tax - Held that - the issue involved the present case has already been decided in appellant s own case Pudumjee Pulp & Paper Mills Ltd Versus Commissioner of Central Excise, Pune-IV 2016 (12) TMI 1046 - CESTAT MUMBAI , where it was held that amount calculated equal to 50% amount calculated towards catering charges by the appellant represents 50% of the basic cost of the catering charges which does not include VAT and Service Tax. As per the Hon ble Bombay High Court decision in case of Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT it was held that if the service tax /Cenvat amount is not recovered from the employee the credit is admissible in respect of outdoor catering services - credit allowed - appeal allowed - decided in favor of appellant.

Issues:
Availing Cenvat credit for outdoor catering services provided to employees; Recovery of 50% catering charges from employees; Dispute regarding service tax recovery; Appeal against Order-in-Original; Applicability of earlier Tribunal decision.

Analysis:

1. The appellant availed Cenvat credit for outdoor catering services provided to their employees, with 50% of the catering charges being recovered from the employees. The adjudicating authority initially held that the appellant was only recovering 50% of the basic value from the workers and not the service tax, thus dropping the demand of ?24,560. However, the Revenue filed an appeal against this decision before the Commissioner (Appeals), who set aside the Order-in-Original and allowed the departmental appeal, leading to the appellant's current appeal.

2. The AGM of the appellant company highlighted a previous Tribunal decision where credit on outdoor catering services was allowed in a similar case. He emphasized that the facts in this case were identical to the previous order and submitted an affidavit to show that the service tax was not recovered from the employees. This submission was crucial in establishing the consistency of treatment in similar cases.

3. The Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned order during the proceedings. The Ld. Superintendent appearing on behalf of the Revenue supported the conclusions drawn in the previous order, setting the stage for a detailed consideration of both sides' arguments.

4. Upon careful consideration of the submissions and perusal of the record, the Tribunal noted that the issue at hand had already been decided in the appellant's favor in a previous case. The Tribunal referenced the earlier decision, which clarified that if the service tax or Cenvat amount was not recovered from the employee, credit would be admissible for outdoor catering services. This legal principle was supported by a relevant judgment from the Hon'ble Bombay High Court, strengthening the appellant's position.

5. Based on the precedent set by the previous Tribunal decision and the legal interpretation provided by the Hon'ble Bombay High Court, the Tribunal concluded that the appellant was entitled to Cenvat credit for outdoor catering services in the present case. Consequently, the impugned order was set aside, and the appeals were allowed, affirming the appellant's right to the credit.

6. The Tribunal, in pronouncing the decision on 10-02-2017, emphasized that the issue in the present case was no longer a matter of first impression, as it had been previously settled. Therefore, the Orders of the Commissioner (Appeals) were deemed unsustainable, leading to the setting aside of the impugned orders and allowing the appeals in favor of the appellant.

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