CENVAT credit on factory canteen catering depends on whether canteen costs enter assessable value; remand ordered.

CENVAT credit on outdoor catering services used for a factory canteen was treated as potentially admissible where the factory was required to maintain a canteen and the food cost formed part of the manufacturer's expenditure and cost of production, affecting the assessable value of the final products. The applicable Larger Bench view was noted, but the record lacked a finding on whether the canteen expenditure was actually included in assessable value. The matter was therefore remanded to the original authority to determine that factual issue, and the availability of credit was made dependent on that determination.

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Issues: Whether CENVAT credit on outdoor catering service used in the factory canteen was admissible, and whether the matter required remand for examination of whether the canteen cost formed part of the assessable value of the final products.

Analysis: The disputed credit related to outdoor catering service availed for supply of food to workers in the factory canteen. The applicable Larger Bench view treated such service as an input service where the factory was required to maintain a canteen and the cost of supplying food to workers formed part of the manufacturer's expenditure and entered the cost of production, thereby affecting the assessable value of the final products. On the present record, no finding had been recorded by the lower authorities on whether the canteen expenditure was included in the assessable value, and that factual aspect was necessary to apply the Larger Bench ruling.

Conclusion: The matter was remanded to the original authority to determine whether the canteen cost formed part of the assessable value, and the credit would depend on that finding.

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