2018 (5) TMI 30 - AT - Service Tax

Appeal granted for Cenvat Credit on 'Outdoor Catering Service' for workers

The Tribunal allowed the appeal, granting Cenvat Credit for Service Tax paid on 'Outdoor Catering Service' provided to employees under the Building and ... CENVAT credit - ‘Outdoor Catering Service’ (Canteen Service) provided to the employees pursuant to the provisions of the Building and other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 - Held that: - the Division Bench of this Tribunal in the case of Reliance Industries Ltd [2016 (8) TMI 123 - CESTAT MUMBAI] considered admissibility of Cenvat Credit of ‘Outdoor Catering Service’, after amendment to the definition of input service with effect from 1.4.2011 and held that the credit is admissible if the ‘Outdoor Catering Service’ is not meant to be used for personal use. In the present case, the appellant has categorically submitted that the ‘Canteen Services’ has been provided to the employees in pursuance to the aforesaid Building and other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 and not for personal use. Credit allowed - appeal allowed - decided in favor of appellant. Issues:- Entitlement to avail Cenvat Credit of Service Tax paid on 'Outdoor Catering Service' provided to employees under a specific Act.Analysis:The appeal was filed against an order passed by the Commissioner (Appeals) regarding the entitlement of the appellants to avail Cenvat Credit of Service Tax paid on 'Outdoor Catering Service' provided to employees under the Building and other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996. The appellant argued that the Service Tax paid on 'Outdoor Catering Services' is admissible to Cenvat Credit as the Act mandates the provision of 'canteen services' to employees. The appellant relied on the judgment of the Tribunal in the case of Reliance Industries Ltd vs CCE & ST, LTU, Mumbai, which held that such services are not meant for personal use but are provided during the course of employment in compliance with the Act.The Authorized Representative (AR) reiterated the findings of the Commissioner (Appeals) and referred to the judgment in the case of AET Laboratories Pvt Ltd vs CCE.C&ST, Hyderabad-1, which stated that after an amendment to the input service definition from 1.4.2011, Cenvat Credit of Service Tax paid on 'Outdoor Catering services' is not admissible. However, the Tribunal, in the case of Reliance Industries Ltd, considered the admissibility of Cenvat Credit of 'Outdoor Catering Service' post the amendment and held that credit is permissible if the service is not intended for personal use. In the present case, the appellant clarified that the 'Canteen Services' were provided to comply with the Building and other Construction Workers Act and not for personal use.Considering the submission and the precedent set by the Reliance Industries Ltd case, the Tribunal set aside the impugned order and allowed the appeal, granting any consequent relief as per the law. The judgment emphasized that the credit for 'Outdoor Catering Service' is admissible if the service is provided in compliance with specific regulations and not intended for personal use by employees.