Appeal dismissed on inadmissible CENVAT credit for 'Catering' and 'Tour Operator' services. Upheld penalty under Rule 15(1).

The appeal challenging the inadmissibility of CENVAT credit on 'Catering Services' and 'Tour Operator' services due to recovery from employees was dismissed. The Tribunal upheld the inadmissible credit and imposed a penalty under Rule 15(1) of Cenvat Credit Rules, 2004, citing precedents favoring the Revenue. The decision emphasized that even without mens rea, inadmissible credits would not be allowed under the Cenvat Credit Rules, 2004.

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Issues: Admissibility of CENVAT credit on 'Catering Services' and 'Tour Operator' services where part of the amount was recovered from employees.

Analysis:
1. The appeal challenged the inadmissibility of CENVAT credit amounting to Rs. 2,89,789/- taken by the appellant due to recovery from employees. A penalty of Rs. 2,000/- was also imposed under Rule 15(1) of Cenvat Credit Rules, 2004.

2. The appellant's advocate argued that there were separate contracts with the canteen contractor and the employees, emphasizing no restriction in the Cenvat Credit Rules, 2004 on amounts recovered from staff members. However, he acknowledged that the entire demand was linked to employee recoveries.

3. The Revenue's representative cited the judgment of the Hon'ble Bombay High Court in Commissioner of Central Excise Nagpur vs. Ultratech Cement Ltd., emphasizing that the manufacturer cannot claim credit for the part of service tax borne by the consumer. Additional reliance was placed on Tribunal judgments in various cases.

4. The Tribunal, after reviewing submissions and precedents, concluded that the issue of admissibility of credit when amounts were recovered from employees was settled by previous judgments favoring the Revenue. The absence of a restriction in the Cenvat Credit Rules, 2004 did not support the appellant's case. Consequently, the inadmissible credit and the penalty under Rule 15(1) were upheld.

5. Ultimately, the appeal was dismissed, with the operative part pronounced in court. The decision reinforced the principle that inadmissible credits, even without mens rea, would not be allowed under the Cenvat Credit Rules, 2004.

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