Tribunal Allows Cenvat Credit for Catering Services: Not Personal Consumption

The Tribunal upheld the Commissioner's decision to allow cenvat credit on outdoor catering services, finding that the services were not primarily for personal consumption but to enhance the working environment for manufacturing activities. The Tribunal distinguished a previous case cited by the Revenue, emphasizing that no amounts were recovered from employees for the catering service in this instance. Consequently, the Tribunal dismissed the Revenue's appeal and the Cross Objection filed by the appellant, affirming the allowance of cenvat credit based on the specific circumstances and purpose of the catering service.

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Issues:
- Appeal against allowing cenvat credit on outdoor catering service
- Interpretation of the definition of 'input service' post-amendment
- Nexus between input service and manufacturing activities

Analysis:
The appeal was filed by the Revenue against an order passed by the Commissioner of Central Excise (Appeals) Gurgaon, which allowed cenvat credit of service tax paid on outdoor catering service in favor of the appellant. The Revenue contended that the appellant had availed cenvat credit on outdoor catering service during a specific period, which, as per the amended definition of 'input service' from April 2011, is not categorized as an input service for cenvat credit purposes. Another ground raised was the lack of nexus between the input service and the manufacturing activities undertaken by the Respondent.

During the proceedings, the Ld. DR for the appellant relied on a judgment of the Hon'ble Gujarat High Court to support the contention that cenvat credit should not be allowed on the disputed service. On the other hand, the Ld. Consultant for the respondent argued that the exclusion clause in the definition of input service did not apply to the case since the outdoor catering service was not used for personal consumption by the employees but to enhance the working environment for manufacturing activities. The Commissioner (Appeals) had specifically noted that the catering service was not for personal consumption but for facilitating the working environment of the employees engaged in manufacturing excisable goods.

The Tribunal analyzed the amended definition of 'input service' effective from April 2011, which excluded certain services, including outdoor catering, if primarily used for personal consumption by employees. Since the catering service in this case was not for personal use but for maintaining a conducive working environment to enhance productivity, the Commissioner (Appeals) correctly allowed the cenvat credit. The Tribunal also cited a previous case where cenvat credit on a similar service was allowed. The Tribunal distinguished the judgment cited by the Ld. DR, stating that in that case, amounts were recovered from employees for the canteen service, unlike in the present case where no such recovery occurred.

Ultimately, the Tribunal found no fault in the impugned order and dismissed the Revenue's appeal, along with disposing of the Cross Objection filed by the appellant. The decision was made after considering the arguments from both sides and examining the relevant records.

This detailed analysis of the issues involved in the judgment provides a comprehensive understanding of the Tribunal's decision regarding the cenvat credit on outdoor catering service and the interpretation of the 'input service' definition post-amendment.

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