2011 (9) TMI 1118 - HC - Service Tax

Court allows Cenvat Credit for Canteen Services under Service Tax

COMMISSIONER OF C. EX., BANGALORE-II Versus TATA STEEL LTD.

The High Court upheld the Tribunal's decision allowing the assessee to claim Cenvat Credit on Service Tax paid for canteen services. The Court emphasized ... CENVAT credit - canteen services - Held that: - reliance placed in the case of Commissioner of Central Excise, Bangalore-III, Commissionerate Versus Stanzen Toyotetsu India (P.) Ltd. [2011 (4) TMI 201 - KARNATAKA HIGH COURT], where it was held that it becomes a condition of service as far as the employees are concerned - credit allowed - decided in favor of assessee. Issues:Challenge to Tribunal's order allowing Cenvat Credit on Service Tax paid for canteen services.Analysis:The High Court dealt with the appeal filed by the revenue challenging the Tribunal's decision allowing the assessee to avail Cenvat Credit on Service Tax paid for canteen services. The Tribunal's finding was contested in this appeal, questioning its correctness.In a related case, the Court previously addressed the issue of canteen services in the matter of Commissioner of Central Excise v. M/s. Stanzen Toyotetsu India (P) Ltd. The Court highlighted that when an employer provides outdoor canteen facilities due to a statutory obligation under the Factories Act, it is considered a condition of service for employees. The payment of Service Tax on such canteen services is not a charitable act but an obligatory legal requirement that influences the final product's pricing.Consequently, the High Court concluded that the substantial question of law in this appeal is resolved in the same manner as in the aforementioned case. The Court found no merit in the revenue's appeal and ruled in favor of the assessee, determining that the substantial question of law favored the assessee over the revenue.