CENVAT credit on canteen-related services upheld where no employee recovery for subsidised food was alleged.

CENVAT credit was treated as admissible for outdoor catering service and manpower recruitment service used to run the factory canteen, because services used in the course of the assessee's manufacturing business were treated as input services under Rule 2(1) of the CENVAT Credit Rules, 2004. The absence of any allegation that amounts were recovered from employees for subsidised food supported the credit claim. Following earlier Tribunal and High Court views on canteen-related services, the Revenue's appeal was dismissed and the credit was upheld.

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Issues: Whether CENVAT credit was admissible under Rule 2(1) of the CENVAT Credit Rules, 2004 in respect of outdoor catering service and manpower recruitment service used for serving food in the canteen.

Analysis: The show-cause notice did not allege recovery of any amount from employees towards subsidised food. Credit had been allowed on the basis that services used in the course of manufacturing business qualify for input service credit, following the view taken in earlier Tribunal and High Court decisions.

Conclusion: The credit was held admissible and the Revenue's appeal was dismissed.

Ratio Decidendi: Services used in the assessee's manufacturing business, including canteen-related services where no contrary allegation of employee recovery is made, qualify as input services for CENVAT credit.

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