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TMI Blog2018 (4) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... it wherein they engaged the services of outdoor catering service for providing the catering services to their employees. Such service provider raised the bill along with service tax for which they availed the CENVAT credit. Department is of the view that such CENVAT Credit cannot be availed after the provisions of Rule 2(1) of CENVAT Credit Rules, 2004 are amended which restricts availment of CENVAT credit in respect of "outdoor catering service " 3. Learned counsel relies upon the judgment of the Tribunal in the case of M/S. Hindustan Coca Cola Beverages Pvt. Ltd.: 2016TIOL-2223-CESTAT-HYD. wherein the Bench took a view that the canteen service needs to be provided by an employer within the factory premises in compliance with the provisions of the Factories Act, 1948, hence any service tax paid therein, credit is to be allowed. 4. However, the Tribunal in the case of AET Laboratories Pvt. Ltd.: 2016 (42) STR 720 (Tri. -Bang.), in a similar situation has held that consequent to the amendment to Rule 2(1) of CCR, 2004, the position is different and the CENVAT credit cannot be permitted to be availed. Since there is divergence of view in the Benches of Tribunal on the very same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de variety of services. It is his further submission that all that has been done by the deletion of the words activities relating to business 'such as' is that words which were superfluous were removed and the exclusive part of the definition was only illustrative and not exhaustive continues to cover all other activities that would relate to business of manufacture or business of provision of service. The substituted definition by retaining the means part, as well as the continued use of the words "directly or indirectly" and "in or in relation to" which are words of width and amplitude as well as the use of the words "includes" is only illustrative and not exhaustive. He further submitted that the perusal of the excluded activities would show that these are services that a person must ordinarily pay and obtain for his personal consumption and it is only when they are contractually included as a benefit that the employer provides, that it gets excluded as a service used primarily for personal use or consumption of any employee. 4.2 It his submission that the other services such as beauty treatment, health services, cosmetic and plastic surgery, membership of a clu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actories Rules, 1969 and non-observance of the said provisions would entail penal provisions against the appellant. He also submitted that w.e.f 1.4.2011, the definition of input service in Rule 2(I) is substituted to exclude inter alia "outdoor catering service" when such service is used primarily for personal use or consumption of an employee, thus the exclusion is only those specified services when used primarily for personal use or consumption of any employee. According to the learned counsel, the expression 'primarily' and 'personal use or consumption of any employee' is quite conspicuous. The expression 'personal use' would mean private use by an employee, To support this submission, he relied upon the decision of the Bombay High Court in Municipality of Dhulia vs, New Pratap Spinning Weaving and Manufacture Co. Ltd: AIR 1935 Bom - 415, 5. 1 It is his submission that the outdoor catering cost or expenditure incurred by the appellant for providing food and beverages inside canteen has formed part of manufacturing cost and the cost of final product, which is very much part of assessable value of the final product manufactured by the appellant. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain specific categories of services. 6.2. Therefore, the "outdoor catering service" was one of the input services which have been specifically excluded She further submitted that it is very clear from the Budget Speech of the Finance Minister made on the floor of the Parliament and the Joint Secretary (TRU) letter and consequent amendment made by Notification No. 3/2011 which makes the intention of the Legislature very clear in excluding "outdoor catering service" even if the cost is borne by the employer, Once this amendment has excluded this service out of the purview of CENVAT Credit Rules, the question of who bears the cost or being mandated under Factories Act is not tenable. Booking of certain cost in their account cannot be the criteria for testing the eligibility of credit unless provided by the statute In support of her submission, she relied upon the following decisions of the Tribunal wherein it has been held that the CENVAT credit on outdoor catering service after 1.412011 is not eligible. * Empire Industries Ltd. vs. Commissioner of Central Excise, Mumbai 111 Appeal E/88060/13 dated 1512.2017 (2018-TIOL-228-CESTATMUM) * Applied Micro Circuits India Pvt Ltd v Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintenance, insofar as they relate to a motor vehicle which is not a capital goods, except when used by (a) a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by such person; or an insurance company in respect of a motor vehicle insured or reinsured by such person; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarilyfor personal use or consumption ofany employee; Prior to 1,4.2011, the definition of 'input service' stood thus: Rule 2(1) "input service" means any service, - (i). used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the legislature for the changes brought by way of amendment in the definition of 'input service'. Further, we also note that primarily the service should be first covered under the definition of 'input service' and once the service is not covered due to exclusion clause irrespective of the fact whether the cost of service has been taken as expenditure in the books of accounts does not render the services as an admissible for CENVAT credit, We also find that the food is always mainly for personal consumption only. The canteen provided in the company is mainly for the personal consumption of the employee and it cannot be interpreted in any other way. Therefore, once such services are excluded, whether the employer or employee bears the cost partially or fully, has no bearing on the amendment, Therefore, keeping in view above discussions and the various decisions cited by both the parties, we are of the considered view that the "outdoor catering service" is not eligible for input service credit post amendment dated 1.41.2011 vide Notification No.3/2011 dated 18.3.2011. 8. The reference is answered accordingly. 9. With the above observations, we revert the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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