Input service credit for outdoor catering remains available when no employee recovery is made and food cost enters assessable value.

Input service credit on outdoor catering service was held admissible where the assessee did not recover any amount from employees and the cost of food formed part of the assessable value. The controlling principle applied was that welfare-oriented catering services can qualify for credit when the expense is embedded in business valuation and there is no employee recovery. On those facts, the Revenue's challenge failed and the earlier orders allowing credit were affirmed.

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Issues: Whether input service credit on outdoor catering service was admissible to the assessee.

Analysis: The dispute turned on whether outdoor catering service, treated as a welfare activity, could be denied input service credit. The controlling principle applied was that such credit is available where the assessee does not recover any amount from employees and the cost of food supplied forms part of the assessable value. As there was no allegation of any recovery from employees, the earlier orders allowing credit were consistent with the settled legal position.

Conclusion: Input service credit on outdoor catering service was held to be admissible, and the Revenue's challenge failed.

Ratio Decidendi: Input service credit on outdoor catering service is available when no amount is recovered from employees and the food cost is included in the assessable value.

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