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TMI Blog2025 (3) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... ces' cannot be availed, post 01.04.2011 in view of the exclusion clause C(ii) to the definition of input service 2(l) of Cenvat Credit Rules, 2004. Therefore, service tax paid on 'outdoor catering services' is not eligible for availment of Cenvat credit. Demand of interest - HELD THAT:- The confirmation of demand of interest on the cenvat credit demand is not sustainable following the decision of the Hon'ble High Court of Karnataka in case of M/s. Bill Forge. Penalty - HELD THAT:- It is found for the earlier period this Tribunal has set aside the penalty proceedings under Rule 15(1) of the Cenvat Credit Rules, 2004 and also in the adjudications for the subsequent periods the penalty has been dropped by the adjudicating aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant and non-observance of Section 46 of the Factories Act, 1948 read with Karnataka Factories Rules relating to maintenance of canteen would entail penalty and prosecution. Apart from providing and maintaining canteen inside the factory premises, the appellant is also obligated to provide food and beverages to its workers and for this purpose, the appellant has engaged the services of outdoor caterer, who provide services in relation to supply of food and beverages inside the canteen and factory premises and the cost of the outdoor catering incurred by the appellant has formed part of the cost of final product and excise duty is also paid by them. The service tax paid and incurred by the appellant is availed as cenvat credit as ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 46 of the Factories Act, 1948 is eligible for cenvat credit. These decisions are in Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CCE-2015 (38) S.T.R. 129 (Tri.-Mum.); Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CCE-2016-TIOL-2223-CESTAT-HYD; Yazaki Wiring Technologies India Pvt. Ltd. Vs. CCE-2016-TIOL-858-CESTAT-MAD.; Reliance Industries Ltd. Vs. CCE-2016-TIOL-2392-CESTAT-MUM. Further there was also a decision of this Hon'ble Tribunal which held otherwise. Due to divergent views of the Tribunal on entitlement to cenvat credit on 'outdoor catering services' received by manufacturer post 01.04.2011, the matter was referred to the Larger Bench of the Tribunal in Wipro Limited Vs. CCE-2018 (9) G.S.T.L. 285 (Tri.-Bang.). The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt's own case as tabulated above. Also, the Hon'ble High Court's judgment was affirmed by the Hon'ble Supreme Court reported in 2021 (55) GSTL 129 (SC). The present dispute pertains to one of the show-cause notice for the subsequent period from October 2011 to March 2012, which demanded cenvat credit availed on 'outdoor catering' service of Rs. 58,15,867/- along with interest and proposed penalty. The Revenue has passed adjudication order confirming demand of ineligible cenvat credit of Rs. 58,15,867/- along with interest and also appropriated the reversal of entire credit voluntarily done by the appellant on 14.03.2013 and has also imposed penalty of Rs. 58,15,867/- under Rule 15(1) of Cenvat Credit Rules, 2004. Aggrieved by the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions, hence the demand of interest is not tenable. 6. The learned counsel further submits that imposition of penalty of Rs. 58,15,867/- is untenable since the entire issue involved genuine and bonafide interpretation of statutory provisions; in appellant's own case this Tribunal vide F.O. No.21681/2018 dated 29.10.2018 set aside the penalty as the issue is related to interpretation of Rule 2(l) of Cenvat Credit Rules, 2004; further in appeal E/20920/2018 for the period April 2013 to September 2013, the adjudicating authority himself has refrained from imposing any penalty by specifically recording a finding that the entire issue was related to statutory interpretation; Since the appellant had voluntarily reversed the entire cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to interpretation of Rule 2(l) of Cenvat Credit Rules, 2004, following this Tribunal's decision in appellant's own case, wherein the penalty under Rule 15(1) of Cenvat Credit Rules, 2004 has been set aside in the Appeal No. E/27548/2013 and, setting aside of the penalty by the adjudicating authority in the subsequent adjudications on the issue, the penalty imposed is unsustainable. 10. We find that the confirmation of demand of interest on the cenvat credit demand is not sustainable following the decision of the Hon'ble High Court of Karnataka in case of M/s. Bill Forge, supra. As regards the penalty, we find for the earlier period this Tribunal has set aside the penalty proceedings under Rule 15(1) of the Cenvat Credit Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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