Tribunal upholds denial of credit on catering service; sets aside denial on manpower recruitment service.

The Tribunal set aside the denial of input service credit on manpower recruitment service but upheld the denial of credit on outdoor catering service due to a statutory amendment. The appellant was not penalized as the show cause notice predated the amendment. Consequently, the appeal was disposed of with the denial of input service credit on outdoor catering service.

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Issues:
1. Denial of input service credit on manpower recruitment service and outdoor catering service.

Analysis:
The appellant appealed against the impugned order denying input service credit on manpower recruitment service and outdoor catering service. The appellant, a manufacturer of excisable goods, faced the denial of credit due to non-mentioning of the service name in the invoices for manpower recruitment service and the lack of direct relation of outdoor catering service to manufacturing. The appellant argued that non-mentioning the service name in the invoice does not negate the entitlement to input service credit. The appellant also cited a decision by the Hon'ble Bombay High Court to support the allowance of input service credit for outdoor catering service.

The opposing argument contended that as per Rule 2(l) of Cenvat Credit Rules, 2004, effective from 1.4.2011, the appellant was not eligible for input service credit on outdoor catering service. The Tribunal considered the submissions and found that while the invoice mentioned a manpower recruitment agency instead of the service, this discrepancy did not warrant denial of input service credit. However, regarding outdoor catering service, the Tribunal noted the amendment in the statute from 1.4.2011, which excluded outdoor catering service from the definition of input service. Consequently, the appellant was deemed ineligible for input service credit on outdoor catering service. The Tribunal also observed that the show cause notice issued in 2012 was prior to the amendment, thus penalty imposition was not justified.

In conclusion, the Tribunal set aside the impugned order denying input service credit on manpower recruitment service but upheld the denial of credit on outdoor catering service due to the statutory amendment. The appellant was not penalized due to the timing of the notice vis-a-vis the statutory change. Therefore, the appeal was disposed of with the denial of input service credit on outdoor catering service.

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