Cenvat credit on statutory canteen services allowed as an input service linked to manufacturing and employee welfare.

Cenvat credit on service tax paid for outdoor canteen services was treated as admissible because the canteen facility was provided under a statutory obligation under factories law and formed part of the conditions of service for employees. The service was regarded as a welfare expense connected with manufacturing activity and within the inclusive scope of 'input service' under the Cenvat Credit Rules, 2004, so credit was allowed in favour of the assessee and against the Revenue.

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Issues: Whether Cenvat credit is admissible on service tax paid for outdoor canteen services used by the manufacturer.

Analysis: The service was treated as an input service because canteen facilities were provided pursuant to a statutory obligation under the factories law and formed part of the conditions of service for employees. The service was regarded as a welfare expense connected with the manufacturing activity and falling within the inclusive scope of input service under the Cenvat Credit Rules, 2004.

Conclusion: Cenvat credit on service tax paid for canteen services was held admissible, against the Revenue and in favour of the assessee.

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