2023 (5) TMI 379 - AT - Central Excise

Tribunal allows appeals due to time-barred notice, grants CENVAT credit for specific services.

M/s Emco Ltd. Versus Commissioner of Central Excise-Mumbai-III

The Tribunal allowed both appeals based on the grounds of the limitation for the show cause notice dated 07.01.2010, which was found to be time-barred. ... CENVAT Credit of Service Tax - input services - Outdoor Catering Service - Rent-a-Cab Service - Club or Association Service - services availed to provide food coupons to the employees which is described by appellant as Hospitality Service - extended period of limitation - HELD THAT:- Insofar as the proceedings initiated through show cause notice dated 07.01.2010 are concerned, the show cause was issued beyond normal period of limitation and there are no reason justifying invocation of extended period. All the proceedings initiated through show cause notice dated 07.01.2010 dropped as time barred. Issues involved in show cause notice dated 17.09.2010 - HELD THAT:- Hon’ble High Court of Karnataka in the case COMMISSIONER OF CENTRAL EXCISE, BANGALORE-I VERSUS BELL CERAMICS LTD. [2011 (9) TMI 792 - KARNATAKA HIGH COURT] has held that the Service Tax paid by the assesses under Rent-A-Cab Service and Outdoor Catering Service provided to its employees to transport them to the factory and back and to provide food to employees fall under input services and are entitled for CENVAT Credit. Following the said ruling of Hon’ble Karnataka High Court, CENVAT Credit of Service Tax paid on Outdoor Catering Service and Rent-a-Cab Service are allowed in the present appeal. Club Services - HELD THAT:- The issue is no more res integra and this Tribunal has decided it in the case of M/S VINAYAK STEELS LTD. VERSUS CCE, C & ST, HYDERABAD [2017 (7) TMI 346 - CESTAT HYDERABAD], wherein it was decided that corporate membership of the club is utilized for business meetings and sales meetings and therefore, for the period prior to 01.04.2011, Service Tax paid on corporate membership of club was admissible for availment of CENVAT Credit - CENVAT Credit of Service Tax paid on corporate membership of club to the appellant stands allowed. Appeal allowed. Issues involved: The issues involved in the judgment are the denial of CENVAT Credit of Service Tax paid on various services such as Outdoor Catering Service, Rent-a-Cab Service, Club or Association Service, and services availed to provide food coupons to employees.Summary of Judgment:Issue 1 - Limitation for Show Cause Notice dated 07.01.2010:The first show cause notice dated 07.01.2010 was challenged on the grounds of limitation. The Tribunal found that the show cause notice was issued beyond the normal period of limitation without any justification for invoking the extended period. Consequently, all proceedings initiated through this show cause notice were dropped as time-barred.Issue 2 - CENVAT Credit on Outdoor Catering Service and Rent-a-Cab Service:Regarding the show cause notice dated 17.09.2010, the Tribunal referred to a ruling of the Hon'ble High Court of Karnataka which held that Service Tax paid on Rent-A-Cab Service and Outdoor Catering Service provided to employees for transportation and food provision fell under input services eligible for CENVAT Credit. Following this precedent, the Tribunal allowed CENVAT Credit on these services in the present appeal.Issue 3 - CENVAT Credit on Club Services:The Tribunal noted that the issue of CENVAT Credit on corporate membership of a club had been previously decided by the Tribunal in a case involving Vinayak Steels Limited. It was held that corporate club membership utilized for business purposes was eligible for CENVAT Credit before 01.04.2011. Relying on this precedent, the Tribunal allowed CENVAT Credit on Service Tax paid for corporate club membership to the appellant.In conclusion, both appeals were allowed based on the findings related to the limitation of the show cause notice dated 07.01.2010 and the eligibility of CENVAT Credit on Outdoor Catering Service, Rent-a-Cab Service, and Club Services as per relevant legal precedents.