Appellant's Cenvat Credit Appeal Dismissed for Recovered Catering Charges

The appeal was dismissed as the appellant was not entitled to avail Cenvat Credit for Outdoor Catering Service charges recovered from their employees, following the precedent set in Commissioner Vs. Ultratech Cement Ltd. The Member (Judicial) upheld the disallowance of the appellant's appeal, citing that if the cost of food is borne by the worker and service tax by the ultimate consumer, the manufacturer cannot claim credit. Therefore, as the cost of catering was recovered from the employees, Cenvat credit was deemed inadmissible.

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Issues:
Whether the appellant is entitled to avail Cenvat Credit in respect of Outdoor Catering Service when charges of the same were recovered from their employees.

Analysis:
The appeal was directed against an Order-in-Appeal passed by the Commissioner, upholding the disallowance of the appellant's appeal. Despite multiple notices and adjournment requests, none appeared on behalf of the appellant during the proceedings. The Asstt. Commissioner representing the Revenue reiterated that Cenvat credit is not admissible when the assessee recovers Outdoor Catering Charges from their employees, citing various judgments to support this stance.

On careful consideration of the submissions and judgments relied upon, the Member (Judicial) referred to the Hon'ble High Court judgment in the case of Commissioner Vs. Ultratech Cement Ltd, which established that if the cost of food is borne by the worker and the service tax is borne by the ultimate consumer (worker), the manufacturer cannot take credit of that part of the service tax. Given that the cost of catering was indeed recovered from the employees in the present case, the Member (Judicial) concluded that Cenvat credit was not admissible. Consequently, the impugned order was upheld, and the appeal of the appellant was dismissed.

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