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of <h1>Tribunal Overturns Orders, Recognizes Outdoor Catering Services as Essential for Optimal Working Conditions and Efficiency.</h1> <h3>M/s. Varroc Engineering Private Limited (Plant VII) Versus Commissioner of Central Excise & Service Tax, Aurangabad</h3> The Tribunal allowed the appeal, overturning prior orders, by recognizing the importance of outdoor catering services in maintaining optimal working ... CENVAT Credit - input services - outdoor catering service - period from February 2014 to March 2015 - HELD THAT:- The period involved in the present case is from February 2014 to March 2015 and therefore, the amended definition of input service (w.e.f. 01.04.2011) is applicable. The “Outdoor Catering service” being availed by the Appellant has a direct impact on the manufacturing process and the cost of the final product manufactured by the Appellant. In the event, the Appellant does not avail the said service, the employees in the Appellant-company would be compelled to step out of the factory premises for refreshments, which would lead to loss of manhours for the Appellant-company. This may prima facie seem menial, however, when considered at a larger scale, this translates into an additional cost for the Appellant. Therefore, by availing the said service, the Appellant company attempts to ensure proper working conditions for its employees and reduce loss of manhours. Hon’ble Rajasthan High Court in COMMISSIONER, CENTRAL EXCISE VERSUS M/S MANGLAM CEMENT LTD. [2017 (11) TMI 483 - RAJASTHAN HIGH COURT], considered the very same issue, as in the present case, for a period post the amendment of the definition of input service (w.e.f. 01.04.2011) and has held that ‘Outdoor catering’ services are required to be carried out for the process of manufacture and delivery. Appeal allowed - decided in favor of appellant. Issues:Alleged wrongful availment of Cenvat Credit on outdoor catering service.Analysis:The Appellant, engaged in manufacturing automobile parts, received a Show Cause Notice for allegedly wrongly availing Cenvat Credit on outdoor catering services. The Adjudicating Authority confirmed the demand and imposed a penalty, which was upheld by the Commissioner (Appeals), leading to the present appeal before the Tribunal.The Appellant argued that the catering service was essential for ensuring optimal working conditions for employees, directly impacting the manufacturing process and final product cost. The Revenue contended that outdoor catering services were excluded from the definition of 'input service' post an amendment in 2011, making the Cenvat credit ineligible. The Appellant cited a Tribunal decision in Wipro Ltd. v. CCE, which supported their stance.The Tribunal noted the relevant period from February 2014 to March 2015 fell under the amended definition of input service. It recognized the importance of outdoor catering services in maintaining proper working conditions and reducing loss of manhours for the company. The Tribunal also referenced a judgment by the Rajasthan High Court, which held that outdoor catering services were necessary for the manufacturing process and delivery, emphasizing their relevance.Based on the binding precedence of the Rajasthan High Court judgment over the Tribunal's earlier decision, the Tribunal allowed the appeal filed by the Appellant, overturning the previous orders. The decision was pronounced in open court on 6th August 2020.
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