Cenvat credit on factory canteen catering upheld where canteen obligation and production-cost linkage were shown.

Cenvat credit on outdoor catering service used to run a factory canteen was treated as admissible where a statutory obligation to provide a canteen existed and the subsidized food cost formed part of the cost of production. The service was regarded as falling within input service on that basis. Objections seeking remand on worker strength and production cost were not supported by the grounds of appeal, and no contrary factual dispute was shown on those points. The assessee was therefore entitled to retain the credit benefit.

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Issues: Whether Cenvat credit was admissible on outdoor catering service used in the factory canteen for supply of food to employees.

Analysis: The claim was examined in the light of the Larger Bench ruling which had held that, where the statutory obligation to provide a canteen exists and the cost of subsidized food forms part of the cost of production, outdoor catering service used for running the canteen falls within the ambit of input service. The objections seeking remand on the basis of worker strength and cost of production were not supported by the grounds of appeal, and no contrary factual dispute was shown on these aspects.

Conclusion: Cenvat credit on outdoor catering service was admissible and the assessee was entitled to retain the benefit.

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