Cenvat credit on catering service for statutory canteen duty remanded for fresh examination under applicable High Court ruling

Catering service used for factory workers to discharge the statutory canteen obligation under the Factories Act was treated as capable of constituting input service for Cenvat credit, because the duty to provide canteen facilities may be met directly or through an outside caterer. On the facts noted, the service tax paid on such catering service could support credit where the invoices and materials show use for fulfilment of that legal obligation. The dispute was remanded to the adjudicating authority for fresh examination in accordance with law and the Gujarat High Court decision relied upon before the Tribunal.

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Issues: Whether catering service availed for factory workers to discharge the statutory canteen obligation could qualify as an input service for Cenvat credit, and whether the dispute required reconsideration by the adjudicating authority.

Analysis: The appeal concerned credit on catering service used for workers in different departments of the factory. The obligation to provide canteen facilities under the Factories Act was treated as a legal duty that may be discharged directly or through an outside caterer. On the facts noted, service tax paid on such catering service could support Cenvat credit. As the relevant invoices and materials were stated to relate to discharge of the statutory obligation, the dispute required examination in the light of the Gujarat High Court ruling relied upon before the Tribunal.

Conclusion: The matter was remanded to the adjudicating authority for reconsideration in accordance with law and the applicable High Court decision.

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