Tribunal allows Cenvat credit for Outdoor Catering Service, citing Factory Act compliance

The Tribunal allowed seven appeals concerning the eligibility of Cenvat credit for Service Tax paid on Outdoor Catering Service. The Commissioner (Appeals) had disallowed the credit based on a Calcutta High Court ruling, but the Tribunal overturned this decision. Relying on judgments from Bombay, Gujarat, and Allahabad High Courts, the Tribunal held that the credit was admissible when canteen services were provided as mandated by the Factory Act. As a result, the Tribunal set aside the Order-in-Appeal and reinstated the Orders-in-Original, granting relief to the appellants.

---

---

Issues:
Cenvat credit eligibility for Service Tax paid on Outdoor Catering Service.

Analysis:
The judgment involves seven appeals arising from a common impugned Order-in-Appeal passed by the Commissioner, Central Tax (Appeals). The appellants, engaged in manufacturing various components, availed Cenvat credit for Service Tax paid on canteen services provided to workers as required by the Factory Act. The Revenue contended that such credit was not admissible, citing a Calcutta High Court ruling. The Commissioner (Appeals) agreed with Revenue, leading to the appeals before the Tribunal.

The appellant's counsel argued that the Calcutta High Court ruling was inapplicable as it pertained to Income Tax assessments, not Cenvat credit. They cited Bombay, Gujarat, and Allahabad High Court judgments supporting the admissibility of Cenvat credit for Outdoor Catering Service. The Tribunal, after considering the contentions, found the Commissioner (Appeals) reliance on the Calcutta High Court ruling misplaced. It noted that the Bombay, Gujarat, and Allahabad High Courts had held such Service Tax credit admissible when canteen services were provided as required by the Factory Act. Consequently, the Tribunal set aside the Order-in-Appeal and reinstated the Orders-in-Original, allowing all seven appeals.

---