2017 (5) TMI 273 - AT - Central Excise

CENVAT credit - canteen service - Held that - it appears that the entire demand relates to the portion which is recovered from the workers and it is deducted from their salary slips on a regular basis - Hence, this vital fact needs to be duly verified as to how much of the impugned demand pertains to the Cenvat Cenvat credit availed on the portion recovered from the employees during the period in the show cause notice - the matter requires to be remanded back to the adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
Demand of inadmissible credit for service tax paid on canteen service, invocation of extended period, consideration of submissions and case laws, applicability of Cenvat credit, suppression of facts.

Analysis:
The case involved a demand for inadmissible credit of service tax on canteen services for a specific period. The appellants were issued a show cause notice, which was adjudicated with the demand confirmed along with interest and penalty. The appellants appealed to the Commissioner (Appeals) who upheld the order, leading to the appeal before the Tribunal.

The appellant argued that the extended period should not be invoked as the issue was debatable, citing relevant case laws. The AR contended that the extended period was rightly invoked due to the suppression of facts. The Order-in-Original highlighted the contention regarding the recovery of canteen service costs from workers and the inadmissibility of credit for the same.

Upon reviewing the submissions, the Tribunal found that the appellant had indeed taken input credit for outdoor catering services during the period in question. It was established that the cost of catering services was borne by the workers, as evidenced by deductions from their salary slips. The Tribunal noted the need for verification regarding the portion of the demand related to the credit availed on amounts recovered from employees.

The Tribunal decided to remand the matter back to the adjudicating authority for a fresh order. The authority was directed to provide a fair opportunity for the appellant to present their defense, examine the applicability of the extended period, and consider the relevant submissions and case laws. The Tribunal emphasized the importance of verifying the portion of the demand related to the credit availed on amounts recovered from employees.

In conclusion, the appeal was disposed of by way of remand to allow for a comprehensive reevaluation of the case based on the provided guidelines and considerations.