Tax credit denied for catering service in manufacturing. Appeal partly allowed based on precedent.

The court found that catering service tax credit was not admissible for manufacturing finished goods. The judge upheld the demand for service tax and interest, setting aside the penalty imposed, based on a previous Tribunal order considering a Larger Bench decision and a Supreme Court ruling. The Department's appeal was partly allowed.

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Issues:
Eligibility of input service tax credit on catering service for the manufacture of alternator and starter motor.

Analysis:
The issue in this case revolves around the eligibility of input service tax credit on catering service used in the manufacturing process of alternator and starter motor. The respondent argued that they are entitled to such credit based on a Larger Bench decision of the Tribunal in a previous case. On the other hand, the Department contended that a different Tribunal decision and a Supreme Court ruling favored their position.

Upon hearing arguments from both sides, the judge found that the issue of considering catering service as an input service for manufacturing finished goods had been extensively discussed in a previous Tribunal order. This order had considered the Larger Bench decision and a Supreme Court ruling, ultimately concluding that service tax credit for catering service is not admissible for manufactured goods. The judge, following the Supreme Court's decision, upheld the demand for service tax and interest, while setting aside the penalty imposed. Consequently, the Department's appeal was partly allowed.

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