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 of GTC 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

Cenvat credit eligibility: outdoor catering treated as input service pre-amendment, only unreversed balance recoverable.
Only the unreversed balance of Cenvat credit claimed on outdoor catering services can be recovered; amounts already proportionately reversed and notified to the department are not recoverable. Recovery to the extent of costs recovered from employees is legally permissible and may lead to disallowance. For the period Oct 2008-Aug 2009 outdoor catering fell within the definition of "input service" under Rule 2(l) of the Cenvat Credit Rules, 2004; the exclusion of such services took effect from 1.4.2011.