Appellants Granted CENVAT Credit for Service Tax on Factory-Canteen Catering

The Tribunal held that the appellants were entitled to CENVAT Credit for the service tax paid on outdoor catering service received in the factory-canteen. The appeal was allowed in favor of the appellant based on the conditions set by the Tribunal's Larger Bench decision in a previous case.

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Issues involved: Whether the appellant was entitled to avail CENVAT credit of service tax paid on outdoor catering service received for supply of food in the canteen attached to their factory.

Summary:

Issue 1: Entitlement to CENVAT credit
The Tribunal's Larger Bench decision in CCE, Mumbai vs. GTC Industries Ltd. 2008 (12) STR 468 (Tri-LB) covered the issue in favor of the appellant. The decision stated that for a manufacturing unit with over 250 workers, CENVAT credit of service tax paid on outdoor catering service for supplying food to workers in the factory canteen could be utilized for duty payment on excisable products where food cost was part of production cost. The conditions set by the Bench were met in the present case, allowing the appellant to benefit from the decision.

Issue 2: Decision
The Tribunal held that the appellants were indeed entitled to CENVAT Credit for the service tax paid on outdoor catering service received in the factory-canteen during the material period. Consequently, the appeal was allowed.

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