Admissibility of CENVAT credit on catering service upheld, recovery issue for employees to be verified

The Tribunal held that the CENVAT credit on outdoor catering service was admissible based on a decision of the Hon'ble Gujarat High Court. However, the issue of recovery from employees required further scrutiny. The appellant's claim of providing the service free of cost through food coupons was acknowledged, but evidence needed verification. The case was remanded to the Adjudicating authority to verify the absence of recovery from employees, emphasizing the importance of a detailed examination of evidence before a final decision. The appeals were allowed for further verification.

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Issues:
1. Admissibility of CENVAT credit on outdoor catering service.
2. Recovery of amount from employees for outdoor catering service.
3. Remand to Adjudicating authority for verification of facts.

Analysis:
1. The main issue in this case was the admissibility of CENVAT credit on outdoor catering service provided by the appellant to their employees. The appellant had availed CENVAT credit during the period 2008-09 to 2010-11, which was challenged by the Revenue. The appellant argued that the CENVAT credit should be admissible based on judgments of the Hon'ble Bombay High Court and Hon'ble Gujarat High Court. The Tribunal, per Dr. D.M. Misra, held that the CENVAT credit of the service tax paid on outdoor catering service is eligible based on the decision of the Hon'ble Gujarat High Court. However, the issue of recovery of 50% of the service value from employees needed further scrutiny.

2. The second issue revolved around the contention that the appellant had not recovered any amount from their employees for providing the outdoor catering service. The appellant claimed that the canteen service was provided free of cost to employees through food coupons. The Tribunal acknowledged this claim but emphasized the need for scrutinizing the evidence on record and evidence that would be presented before the adjudicating authority. The matter was remitted to the Adjudicating authority for verification of facts regarding the alleged recovery from employees, indicating a need for a detailed examination of the evidence.

3. Lastly, the Tribunal decided to remand the case to the Adjudicating authority for the limited purpose of verifying the claim made by the appellant regarding the absence of recovery from employees for the outdoor catering service. The decision to remand the case highlighted the importance of thoroughly examining the evidence and ensuring that the facts are accurately determined before reaching a final decision. The appeals were allowed by way of remand, emphasizing the need for a detailed verification process to establish the veracity of the appellant's claim.

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