2017 (3) TMI 844 - AT - Central Excise

CENVAT credit - Outdoor Catering Service - denial on the ground that the said Input Service credit as it was not used in relation to manufacture of their finished goods or used beyond the place of removal and hence not covered under the definition of Input Service as per Rule 2(l) of CCR, 2004 - Held that - Service Tax paid in relation to Outdoor catering Service is covered under the scope of Input Services as defined u/r 2(l) of the CCR 2004 as held in the case of M/s Ultratech Cements Ltd 2010 (10) TMI 13 - BOMBAY HIGH COURT - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility of Cenvat Credit on Outdoor Catering Service
2. Interpretation of Rule 2(l) of Cenvat Credit Rules, 2004

Eligibility of Cenvat Credit on Outdoor Catering Service:
The appellant availed Cenvat Credit on Outdoor Catering Service, which was challenged as not being eligible as per Rule 2(l) of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) confirmed the demand for recovery of wrongly availed credit along with interest and penalty. The appellant argued that the service should be considered an "Input Service" based on judgments from the Bombay High Court and Gujarat High Court. The appellant also mentioned that proportionate credit related to the amount recovered from employees had been paid with interest. The Revenue supported the findings of the Commissioner (Appeals).

Interpretation of Rule 2(l) of Cenvat Credit Rules, 2004:
The Tribunal analyzed the scope of "Input Services" under Rule 2(l) of the Cenvat Credit Rules, 2004. Referring to previous judgments involving similar services, the Tribunal concluded that the Service Tax paid on Outdoor Catering Service falls within the definition of "Input Services." Citing cases such as M/s Ultratech Cements Ltd and M/s Feromatik Milacrom (I) Ltd, the Tribunal set aside the impugned order and allowed the appeals with any consequential relief as per the law.

In conclusion, the Tribunal held that the Service Tax paid on Outdoor Catering Service is considered an "Input Service" under Rule 2(l) of the Cenvat Credit Rules, 2004, based on precedents set by previous court judgments. As a result, the impugned order was overturned, and the appeals were allowed, potentially entitling the appellant to consequential relief.