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of <h1>Appeal granted for CENVAT Credit on manufacturing services; catering services deemed ineligible.</h1> <h3>Hindustan Zinc Ltd. Versus CCE-Jaipur</h3> Hindustan Zinc Ltd. Versus CCE-Jaipur - TMI Issues: Denial of CENVAT Credit on catering service, tent service, and design, supply, erection services.Analysis:1. The appellant argued that providing canteen facility to employees is a statutory requirement under the Factories Act, 1948, and is essential for business activities. The appellant also claimed that other services like tent service, design, supply, and erection were used for protecting raw materials and expansion projects. The appellant relied on various judgments to support their claim.2. The respondent contended that the disputed services had no nexus with the manufacture of the final product and should not be considered as input services for CENVAT Credit. The respondent argued that catering service is more of a welfare service than a business-related service. Additionally, the respondent raised the issue of the limitation period for issuing Show Cause Notice (SCN) regarding the wrong availment of CENVAT Credit.3. The tribunal observed that the catering facility provided to employees is a statutory requirement under the Factories Act, 1948. While expenses for catering were included in the product costing, the subsidized rates charged from employees made it ineligible for CENVAT Credit. However, the tribunal found that other services like tent service, design, supply, and erection had a nexus with the manufacturing process, supporting the appellant's claim. The tribunal referred to previous decisions where CENVAT Credit was allowed for similar services.4. Consequently, the tribunal set aside the impugned order and allowed the appeal partially. CENVAT Credit was granted for tent services, business, supply, and erection for rerouting the pipeline. Regarding catering service, the matter was remanded to the Original Authority to determine the actual cost recovered from employees, making the service tax attributable to it ineligible for CENVAT Credit.5. The appeal was disposed of based on the above findings and decisions, providing clarity on the eligibility of CENVAT Credit for different services in the context of the appellant's business operations.
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