2011 (4) TMI 1447 - HC - Central Excise

Division Bench affirms canteen service tax credit eligibility for manufacturers.

Commissioner of Central Excise Bangalore Versus T.G. Kirloskar Automotive Pvt. Ltd.

The Division Bench dismissed the appeal, affirming the assessee's entitlement to cenvat credit on service tax paid for outdoor canteen services. The Court ... - Issues involved: The issue involves the entitlement of the assessee to avail cenvat credit on service tax paid towards canteen services.Summary:Issue 1: Entitlement to cenvat credit on service tax paid towards canteen servicesThe assessee, a manufacturer of Motor Vehicle parts, availed cenvat credit on catering services, leading to a demand notice for wrongful availment. The Tribunal, relying on precedent, allowed the appeal stating the assessee's entitlement to cenvat credit. The revenue appealed the decision.Issue 2: Interpretation of input service for cenvat creditThe Court considered whether services utilized by the assessee in manufacturing final products qualify as input services. It was determined that any service used directly or indirectly in manufacturing constitutes an input service. The definition is inclusive, not exhaustive, allowing for services not expressly mentioned to be considered for cenvat credit.Issue 3: Outdoor canteen services as input serviceThe Court recognized outdoor canteen facilities provided by the assessee as a statutory obligation under the Factories Act, impacting the final product's pricing. Despite not being expressly listed, such services were deemed eligible for cenvat credit under the Cenvat Rules, 2004. The Tribunal's judgment was upheld, affirming the assessee's entitlement to the credit.In conclusion, the appeal was dismissed based on the Division Bench's previous judgment, affirming the assessee's entitlement to cenvat credit on service tax paid for outdoor canteen services.