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TMI Blog2015 (11) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... f that part of the service tax which is borne by the consumer. - Therefore, the issue that the Cenvat Credit can be properly availed by the assessee in respect of outdoor catering services is clearly settled now - Decided in favour of assessee. - C.M.A. No. 1141 of 2015 - - - Dated:- 25-6-2015 - R. Sudhakar And K. B. K. Vasuki, JJ. For the Petitioner : Ms Karthik Sundaram For the Respondent : Mr V Sundareswaran JUDGMENT ( Judgment of the Court was delivered by R. Sudhkar, J. ) This Civil Miscellaneous Appeal filed by the assessee is as against the order of the Customs, Excise and Service Tax Appellate Tribunal in dismissing the appeal filed by the assessee so far as denying the benefit of Cenvat credit on the service tax paid on outdoor catering services provided in the factory for employees of the factory. The assessee has raised the following substantial questions of law in this appeal : 1. Whether Outdoor catering Services availed by the Appellant in its factory, qualified as an 'input service' under Rule 2 (1) of the CENVAT Credit Rules, 2004, as it stood then during the period October 2008 to July 2009 ? and 2. Whether the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue involved in this appeal is whether the assessee can utilise the cenvat credit facilities in respect of outdoor catering services, provided in the factory for its employees, as input service. 6. In an identical circumstance, this Court dealt with the issue in a batch of appeals in C.M.A.Nos.2 of 2010 batch and vide judgment dated 13.02.2015 held in favour of the assessee by following the decision of the Bombay High Court in the case of CCE V. Ultratech Cement Ltd. reported in - 2010-TIOL-745-HC-MUM-ST, wherein all the contentions raised by the respective parties have been considered in extenso including the definition of 'input service' as defined in the case of Maruti Suzuki Ltd. V. CCE reported in 2009 (240) ELT 641 (SC). The Bombay High Court came to the conclusion that the decision of the Larger Bench of the CESTAT in the case of CCE V. GTC Industries Ltd. 2008 (12) STR 468 is a correct law, however, with a rider that where the cost of the food is borne by the worker, the manufacturer cannot take credit of that part of the service tax which is borne by the consumer. 7. For better clarity, the relevant portion of the decision of the Bombay High Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cific/substantive part of the definition is so wide that it would cover innumerable items as input and to avoid such contingency the Legislature has incorporated the inclusive part after the substantive part qualified by the place of use. For example, one of the categories mentioned in the inclusive part is used as packing material . Packing material by itself would not suffice till it is proved that the item is used in the course of manufacture of final product. Mere fact that the item is a packing material whose value is included in the assessable value of final product will not entitle the manufacturer to take credit. Oils and lubricants mentioned in the definition are required for smooth running of machines, hence they are included as they are used in relation to manufacture of the final product. The intention of the Legislature is that inputs falling in the inclusive part must have nexus with the manufacture of the final product. 16. In our earlier discussion, we have referred to two considerations as irrelevant, namely, use of input in the manufacturing process, be it direct or indirect as also absence of the input in the final product on account of the use of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inputs used in or in relation to the manufacture of final products, whereas the inclusive part of the definition of input service extends to services used prior to/during the course of/after the manufacture of the final products. The fact that the definition of 'input service' is wider than the definition of 'input' would make no difference in applying the ratio laid down in the case of Maruti Suzuki Ltd. (supra) while interpreting the scope of 'input service'. Accordingly, in the light of the judgment of the Apex Court in the case of Maruti Suzuki Ltd. (supra), we hold that the services having nexus or integral connection with the manufacture of final products as well as the business of manufacture of final product would qualify to be input service under rule 2(l) of 2004 Rules. 32. As rightly contended by Shri Shridharan, learned Counsel for the respondent - assessee, in the present case, the assessee carrying on the business of manufacturing cement by employing more than 250 workers is mandatorily required under the provisions of the Factories Act, 1948 to provide canteen facilities to the workers. Failure to do so entails penal consequences under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y connected with the business of manufacturing cement and therefore, credit of service tax paid on outdoor catering services would be allowable. 35. The argument of the revenue, that the expression such as in the definition of input service is exhaustive and is restricted to the services named therein, is also devoid of any merit, because, the substantive part of the definition of 'input service' as well as the inclusive part of the definition of 'input service' purport to cover not only services used prior to the manufacture of final products, subsequent to the manufacture of final products but also services relating to the business such as accounting, auditing ....... etc. Thus, the definition of input service seeks to cover every conceivable service used in the business of manufacturing the final products. Moreover, the categories of services enumerated after the expression 'such as' in the definition of 'input service' do not relate to any particular class or category of services, but refer to variety of services used in the business of manufacturing the final products. There is nothing in the definition of 'input service' to sugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proportionate credit to the extent embedded in the cost of food recovered from the employee/worker has been reversed. 40. For all the aforesaid reasons, the question of law framed by the revenue is answered in the affirmative, i.e., in favour of the assessee and against the revenue. However, the CENVAT credit reversed by the assessee, belatedly, having not been verified by the Excise Authorities, the Excise Authorities are directed to verify the same and pass an appropriate order in that behalf. 8. It is relevant to note that various High Courts have concurred with the above-said principle of the Bombay High Court and followed the above-said decision. 1. Therefore, the issue that the Cenvat Credit can be properly availed by the assessee in respect of outdoor catering services is clearly settled now. 2. 10. For the foregoing reasons, we pass the following order: i) Following the above-said decisions, the issue involved in this appeal, is answered in favour of the assessee and against the Revenue; ii) Accordingly this appeal is allowed by setting aside that part of the order of the Tribunal passed in respect of Out door catering services . No costs. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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