Tribunal allows appeals on CENVAT Credit for catering/canteen services. Revenue's argument rejected.

The Tribunal allowed the appeals filed by the Appellant regarding the admissibility of CENVAT Credit on catering/canteen services. Relying on a certificate from a Chartered Accountant stating no amount was recovered from employees, the Tribunal held that the entire Service Tax credit was admissible. The Tribunal found the Revenue's argument of nominal cost recovery unsupported and set aside the First Appellate Authority's order. Consequential relief was granted to the Appellant based on the lack of evidence supporting the Revenue's claim of cost recovery from employees.

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Issues:
Admissibility of CENVAT Credit on catering/canteen services availed by the Appellant.

Analysis:
The appeals were filed by the Appellant concerning the admissibility of CENVAT Credit on catering/canteen services. The Appellant's representative argued that the entire cost of services was incurred by the Appellant, making the entire Service Tax credit admissible. They referenced a certificate from a Chartered Accountant to support their claim that canteen expenses were included in the employee cost forming part of production cost. The Adjudicating authority had dropped proceedings under a show cause notice based on this certificate. The Revenue's representative contended that a nominal portion of food cost was recovered from employees, citing a High Court order requiring the reversal of proportionate credit.

Upon hearing both sides and examining the case records, the Tribunal noted that the issue of CENVAT Credit on canteen/catering services had been settled by a High Court judgment. The matter had been remanded to verify the Appellant's claim based on the Chartered Accountant's certificate, which stated no amount was recovered from employees. The Adjudicating authority accepted this certificate and dropped proceedings. The Tribunal emphasized that the Revenue's argument of nominal cost recovery was baseless and lacked evidence. As the Appellant provided a certificate claiming no cost recovery from employees, the Tribunal held that the entire Service Tax credit was admissible, setting aside the First Appellate Authority's order.

In conclusion, the Tribunal allowed the appeals filed by the Appellant, granting consequential relief. The decision was based on the lack of evidence supporting the Revenue's claim of cost recovery from employees, as affirmed by the Chartered Accountant's certificate.

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