2015 (11) TMI 1539 - AT - Central Excise

Denial of CENVAT credit for catering services at factory canteen under Factories Act

The Appellate Tribunal CESTAT CHENNAI held that CENVAT credit cannot be denied for catering services for maintaining a factory canteen due to obligations ... Denial of CENVAT credit of service tax paid to avail the catering service for the factory - Held that:- Appellant availed catering service to discharge an obligation under the Factories Act. Therefore, there shall not be denial of CENVAT credit in respect of service tax paid to avail the catering service for the factory prior to 31.3.2011. So far as the CENVAT credit in respect catering service availed after 1.4.2011 is concerned, in view of the specific provision in law, appellant is not entitled to the CENVAT credit. Appellant agrees to reverse the same. If such a reversal is made there shall be no interest and penalty, subject to availability of sufficient credit on record. The Appellate Tribunal CESTAT CHENNAI ruled that CENVAT credit cannot be denied for catering services availed to maintain a factory canteen as it is an obligation under the Factories Act. The appellant is entitled to the credit for services availed before 31.3.2011, but not for services availed after 1.4.2011. The appellant agreed to reverse the credit for post-2011 services to avoid interest and penalty. Both appeals were partly allowed.