2018 (8) TMI 327

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....course of audit, it was noticed that they had availed cenvat credit of service tax paid on certain input services namely outdoor catering service, restaurant service and short term accommodation service, which according to the department was not eligible for credit. 3. Show cause notice was issued proposing to disallow the credit and to recover the same alongwith interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalties. In appeal, the Commissioner (Appeals) reduced the penalty to 10% of service tax, but however upheld the demand of interest. Aggrieved, the appellants are now before the tribunal. 4. On behalf of the appellant, the Ld.Consultant, Sh.G.Shivakum....

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....well as the instructors in these hotels during the course period. As the outdoor catering services are not provided to employees and as these are not for personal consumption of employees, the services would not fall within the exclusion clause of the definition. He referred to the Larger Bench decision of the Tribunal in the case of M/s.Wipro Ltd. Vs The CCE Bangalore-III reported in 2018 (4) TMI 149 - CESTAT Bangalore and argued that the said decision is not applicable to the present case, as the food in the present case is consumed by the candidates and not by the employees. Only when the food is given to the employees, it would fall within the exclusion clause. The Ld.Consultant put forward alternative argument stating that it has to be....

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....ant services / outdoor catering services and short term accommodation services. The Ld.Consultant has been at pains to argue that food is provided to the candidates who attend the coaching and not for the employees and therefore would not fall under the exclusion clause of definition of input services. For better appreciation, the relevant portion of definition of input service after 1/4/2011 is reproduced as under :- Rule 2 (1) "Input Service" means any service, (i) used by a provider of output service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products, up to the place of removal, and includes service....