TMI Blog2013 (1) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... f excisable goods in the factory. Also that it was mandatory for a factory having more than 250 workers to provide canteen facility within the factory premises under Section 46 of the Factories Act, 1948 as decided in Stanzen Toyotetsu India (P.) Ltd. case [2011 (4) TMI 201 - KARNATAKA HIGH COURT]. In the instant case, admittedly, the appellant did not have any statutory obligation to provide canteen service during the period of dispute inasmuch as they employed less than 250 workers during that period. Had the appellant employed more than 250 workers in their factory during the said period, they would have contended to that effect in their reply to the show-cause notice. Therefore, the submission of consultant that the number of wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oor Catering Service and Repair/Maintenance of Guest House on the ground that these were not input services defined under Section 2(l) of the CENVAT Credit Rules, 2004. They also demanded interest on the CENVAT credit amount. 2. The learned consultant for the appellant submits that they were entitled to take CENVAT credit during the above period on outdoor catering service which was used in their factory canteen for free supply of food to the factory workers. In this connection, the learned consultant relies on Final Order No. 898/2010 dated 26.5.2010 passed by this Bench in Appeal No. E/1141/2009 filed by the same assessee for a previous period. In the cited case, the learned Single Member relied on the Tribunal s Larger Bench decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to maintain a canteen for the workers and consequently, there is no nexus between the appellant s business of manufacture and marketing of excisable products and the use of outdoor catering service for supply of food to the workers. In this connection, reliance is placed on the Hon ble High Court s judgement in Stanzen Toyotetsu India (P) Ltd. case (paragraph 12). Further, it is pointed out that, in Final Order No. 898/2010 ibid, the number of workers employed by the assessee during the material period was overlooked by the Bench while holding in their favour on the question whether outdoor catering service used in factory canteen for supply of food to the workers could be treated as an input service . With regard to guest house maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority also followed suit and passed the impugned order. In the result, the first and foremost issue debated before this Tribunal is whether the aforesaid activities/services would qualify to be input services for CENVAT credit purpose. 6. As regards outdoor catering service , the above issue was considered by the Tribunal s Larger Bench in GTC Industries case. One of the reasons stated by the Bench for finding nexus between outdoor catering service and the manufacturing activity of the assessee was that the cost of subsidised food supplied by them to workers in the factory canteen by the use of outdoor catering service was included in the cost of production of excisable goods in the factory. The second reason noted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t certainly it is not a charity provided by the employer to the employees. It is an onerous legal obligation imposed on him. The cost incurred in rendering such service will be included in the cost of production. Thus, what emerges from the Bombay High Court s judgement in Ultratech Cement Ltd. case and the Karnataka High Court s judgement in Stanzen Toyotetsu India (P) Ltd. case is that there is a nexus between outdoor catering service (canteen service) and manufacturing activity where the canteen service is provided by the manufacturer in discharge of the statutory obligation under Section 46 of the Factories Act and the cost of such service is factored into the cost of production of the final product. In the instant case, admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laiming support from the Tribunal s Larger Bench decision in GTC Industries Ltd. (supra), this Bench overlooked the fact that the Larger Bench had indeed factored the number of workers also in its decision to hold that the assessee (GTC Industries Ltd.) succeeded in establishing nexus between outdoor catering service and manufacturing activity. Therefore, Final Order No. 898/2010 is not a good precedent for the present case. 8. For the reasons already stated, the impugned order denying CENVAT credit to the assessee on outdoor catering service cannot be interfered with. 9. As regards guest house maintenance service , the claim of the appellant is that it was used for accommodating business guests and conducting business meetings. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
