Tribunal Decides on CENVAT Credit for Catering Services & Employee Costs

The Tribunal held that the admissibility of CENVAT Credit on Outdoor Catering Services was settled by previous court decisions. However, the credit for the cost recovered from employees was deemed inadmissible as per the law laid down by the Hon'ble Bombay High Court. The appeal on this aspect was disallowed. Regarding the number of employees in the factory, the Tribunal rejected the order passed by the First Appellate Authority as the certification provided by the Administrator indicated more than 250 workmen, leading to the appeal being disallowed only on this issue.

---

---

Issues: Admissibility of CENVAT Credit on Outdoor Catering Services; Number of employees in the factory.

Analysis:

1. Admissibility of CENVAT Credit on Outdoor Catering Services:
The appeal was filed concerning the admissibility of CENVAT Credit of Service Tax paid on Outdoor Catering Services by the Appellant. The Appellant's advocate referred to legal precedents, including judgments from the Hon'ble Mumbai High Court and the Hon'ble Gujarat High Court, to support their argument. They contended that the First Appellate Authority had denied the credit based on the number of employees in the factory, which they disputed with a certification from the Administration of Daman and Diu, Dadra and Nagar Haveli Office. The Appellant agreed to reverse proportionate credit as per the Mumbai High Court's decision in a related case. The Revenue's representative argued against the admissibility of CENVAT Credit based on a judgment from CCE Chennai. The Tribunal, after hearing both sides, held that the issue of admissibility of CENVAT Credit on Outdoor Catering Services was settled by previous court decisions. However, the credit for the cost recovered from the employees was deemed inadmissible as per the law laid down by the Hon'ble Bombay High Court. The Appellant did not contest this portion, and the appeal on this aspect was disallowed.

2. Number of employees in the factory:
Regarding the number of employees in the factory, the Administrator of Daman and Diu, Dadra and Nagar Haveli certified that the Appellant's unit in Silvassa had more than 250 workmen. The Appellant operated a single canteen for all its units in Silvassa. The Tribunal noted that when a competent authority had provided certification regarding the number of employees, there was no justification to deny the credit without a contrary opinion from another competent authority. Therefore, the Tribunal rejected the order passed by the First Appellate Authority and disallowed the appeal only to the extent related to this issue.

---