Eligibility of Cenvat credit on CANTEEN SERVICES- Oct 08 To Aug 09

[Arun Deshpande]

Sir,

We were manufacturing exempted as well as dutiable goods. Availing cenvat credit on inputs and inputs services and reversing the proportionate cenvat credit availed on inputs and inputs services under rule 6(3)(a). After the decision ofGTC industries ltd. Vs., CCE Mumbai (LB) - 2008 (9) TMI 56 - CESTAT MUMBAI-LB. And informing the jurisdictional deputy commissioner and receiving acknowledgement we availed cenvat credit on OUTDOOR CATERING SERVICES and reversed the proportionate credit on monthly basis as well as final reversal summary was also given to the department. The department issued SCN denning the CENVAT credit on the grounds of it is not an input service. The total cenvat credit availed on outdoor catering services was Rs. 2,15,000/- during the period Oct 08 to Aug 09 proportionate reversal was Rs. 1,98,000/- Reversal was informed to the department which is not disputed by the department. SCN was issued to us on 28.04.2020 stating that outdoor catering services is not an input service (ineligible credit) The deputy Commissioner adjudicated the case in 2020 after 10 years confirmed the entire demand Rs. 2,15,000/- The commissioner (A) uphold the OIO passed by Dy commissioner. without considering the reversal done and informed to the department. The demand was confirmed on the basis that we had not given the amount recovered from employees. the fact is records and data pertaining to disputed period is not availabe. The case is before single member bench tribunal. Would like to know what worst can happened with us.

Will tribunal confirm the entire demand (uphold the order of commr (a) or will order recovery for balance amount (2,15,000-1,98,000= 17,000) and penalty and interest.

AI Summary

Manufacturing Firm Challenges Denial of Cenvat Credit on Catering Services; Dispute Over Input Service Definition Continues A manufacturing company, producing both exempted and dutiable goods, availed Cenvat credit on inputs and input services, including outdoor catering services, reversing the proportionate credit monthly. Despite informing the department and receiving acknowledgment, a show cause notice (SCN) was issued in 2020, denying the credit on outdoor catering services as it was not considered an input service. The Deputy Commissioner confirmed the demand of Rs. 2,15,000, upheld by the Commissioner (Appeals), without considering the reversals. The case is now before a tribunal. A respondent suggests only the balance amount can be recovered, as outdoor catering was considered an input service during the relevant period.