Cenvat credit for factory canteen catering services was held admissible as an input service linked to statutory manufacturing obligations.

Cenvat credit on service tax paid for outdoor catering used for factory canteen facilities was held admissible because the canteen was provided in discharge of a statutory obligation under the Factories Act and therefore formed part of services used directly or indirectly in relation to manufacture. The service fell within the inclusive scope of input service under the Cenvat Credit Rules, so the tax paid on it was creditable and the assessee succeeded on the issue.

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Issues: Whether Cenvat credit was admissible on service tax paid for outdoor catering services used for factory canteen facilities.

Analysis: The issue stood covered by the earlier Division Bench ruling which held that canteen facilities provided in discharge of a statutory obligation under the Factories Act formed part of the services used directly or indirectly in relation to manufacture. Such service was treated as an input service within the inclusive scope of the Cenvat Credit Rules, and the tax paid thereon was held to be creditable.

Conclusion: Cenvat credit on outdoor catering services was held admissible, and the assessee succeeded on the issue.

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