TaxTMI 
TaxTMI 
Eligibility of Cenvat credit on CANTEEN SERVICES- Oct 08 To Aug 09
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....ligibility of Cenvat credit on CANTEEN SERVICES- Oct 08 To Aug 09<br> Query (Issue) Started By: - Arun Deshpande Dated:- 13-3-2025 Last Reply Date:- 13-3-2025 Central Excise<br>Got 1 Reply<br>Central Excise<br>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 ....
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....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....
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.... 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. Reply By KASTURI SETHI: The Reply: (i) Only the balance amount can be recovered and NOT the entire credit. The amount of Cenvat Credit already reversed cannot be recovered again. (ii) Regarding the denial (reversal) of proportionate Cenvat Credit to the extent of recovery of cost from the employees, the department....
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.... is legally correct. (iii) The service, namely, ''Outdoor Catering " was excluded from the definition of ''input service'' w.e.f. 1.4.2011 whereas in the present issue the period of demand involved is from October, 2008 to August, 2009. So during the relevant period outdooring catering existed in the definition of ínput service in Rule 2 (I) of Cenvat Credit Rules, 2004. The definition of ínput service' was changed w.e.f. 1.4.2011. (iv) Peruse the following case laws word for word :- (a) in the case of INTIMATE FASHIONS (I) PVT. LTD. Versus COMMR. OF GST & C. EX., CHENNAI (2022 (9) TMI 942 - CESTAT CHENNAI} Cenvat credit - Input services - Outdoor catering services - Credit of tax paid for perio....
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....d from January, 2010 to April, 2011 - Amendment was brought forth in definition of "input services" with effect from 1-4-2011 excluding outdoor catering services - Thus, Credit for period from January, 2010 to March, 2011 was to be allowed and for period from 1-4-2011 to 30-4-2011 was to be disallowed - Rule 2(l) of Cenvat Credit Rules, 2004. [paras 5, 6] Appeal partly allowed in favour of assessee (b) Services availed for outward transportation of goods whether eligible to credit? (2) Outdoor Catering services whether eligible to input service credit? (3) Clearing and Forwarding Agent services whether eligible to input service credit? (4) Cargo Handling and Insurance services whether eligible to input service credit ? (5) Club an....
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....d Association services availed by officials of assessee while visiting in connection to business whether eligible to input service credit? The Supreme Court Bench comprising Hon'ble Mr. Justice Kurian Joseph and Hon'ble Mr. Justice Sanjay Kishan Kaul on 6-8-2018 dismissed the Civil Appeal No. 2357 of 2018 filed by Commissioner of Central Excise, Udaipur against the Judgment and Order dated 24-8-2017 of Rajasthan High Court in D.B. Central Excise Appeal Nos. 22-23 of 2017 and DB CEA Nos. 44 of 2015 & 49 of 2017 as reported in (Commissioner v. Manglam Cement Ltd. - 2017 (11) TMI 483 - RAJASTHAN HIGH COURT). While dismissing the appeal, the Supreme Court passed the following order : "We do not find any merit in this appeal. The same is, acc....
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....ordingly, dismissed. However, the question of law is left open." The Rajasthan High Court in its impugned order had held that the services availed for outward transportation of goods would fall within the purview of Rule 2(l) of the Cenvat Credit Rules, 2004 and Service Tax paid thereon would be eligible to input service credit. It was further held that the Outdoor Catering services which were used for delivering or manufacturing goods, were eligible to input service credit. It was also held that the Clearing and Forwarding Agent services availed by the assessee were eligible to input service credit. It was held that Cargo Handling services and Insurance services were eligible to Cenvat credit of Service Tax. The Club and Association s....
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....ervices used by officials while visiting in connection to sale or any other assigned work, were also held to be eligible to input service credit. A report relating to grant of leave in the said Civil Appeal was reported in 2018 (2) TMI 2135 - SC ORDER. [Commissioner v. Manglam Cement Ltd. - 2018 (8) TMI 1180 - SC ORDER] (c) Cenvat credit of Service Tax - Input services - Outdoor Catering services required to be carried out for delivering or manufacturing - Assessee rightly held eligible for credit - Rule 2(l) of Cenvat Credit Rules, 2004. 2010 (10) TMI 13 - BOMBAY HIGH COURT, 2011 (4) TMI 1071 - KARNATAKA HIGH COURT, 2010 (4) TMI 649 - GUJARAT HIGH COURT, 2011 (4) TMI 201 - KARNATAKA HIGH COURT relied on]. [paras 13, 14]------Rajasthan H....
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....igh Court reported as in the case of COMMISSIONER OF CENTRAL EXCISE, UDAIPUR Versus MANGLAM CEMENT LTD - 2017 (11) TMI 483 - RAJASTHAN HIGH COURT. (d) IN THE CASE TOYOTA KIRLOSKAR MOTOR PVT. LTD. Versus COMMISSIONER OF CENTRAL TAX - 2021 (12) TMI 420 - SC ORDER. Input Tax Credit - Input Services - Outdoor Catering Service - With effect from 1-4-2011, outdoor catering services which are used primarily for personal use or consumption of any employee have been excluded from definition of input services as provided in Rule 2(l) of Cenvat Credit Rules, 2004 - In view of above, impugned order denying credit on said services, agreed with - Credit not admissible - Rule 2(l) of Cenvat Credit Rules, 2004. [paras 2 to 4] Appeal dismissed (Emp....
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....hasis is focused on 1.4.2011) (e) IN THE HIGH COURT OF JUDICATURE AT MADRAS COMMISSIONER OF CENTRAL EXCISE, COIMBATORE Versus PRICOL - 2017 (8) TMI 1467 - MADRAS HIGH COURT Cenvat credit of Service Tax - Input service - Outdoor Catering service - Credit of Service Tax paid on Outdoor Catering service used in canteen for employees, whether admissible - Providing canteen facilities to workers mandatory under Factories Act, 1948 - Use of Outdoor Caterer's services having nexus or integral connection with manufacture of final product - Credit of Service Tax paid on Outdoor Catering service admissible - However, credit not admissible to manufacturer on part of Service Tax borne by employees towards the cost of food supplied to them - Rules 2(k....
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....), 2(l) and 14 of Cenvat Credit Rules, 2004. [paras 9, 10, 12] Precedent - Mere filing of appeal in Supreme Court does not amount to stay till a final decision is taken on the said appeal, and when there is no stay against the same, the decision rendered by High Court valid. [para 11] Appeal dismissed<br> Discussion Forum - Knowledge Sharing ....