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Hindustan Coca Cola Beverages Pvt. Ltd. Versus CCE, Meerut-II

2015 (10) TMI 2463 - CESTAT NEW DELHI

Availment of CENVAT Credit - outdoor catering and guest house maintenance service - services are neither directly or indirectly used in or in relation to the manufacture or clearance of final products - Held that:- After amendment of the definition of input service with effect from 1.4.2011 the exclusion part of the definition takes in outdoor catering service also. But it is provided therein that the exclusion applies when such services are used primarily for personal use or consumption of any .....

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ct from 1.4.2011 the definition of input service was very wide so as to include all activities that would come under the activities of business of manufacture. Annexure B shows that all invoices except 2 pertain to the period prior to 1.4.2011. These two invoices are dated 18.4.2011 and 18.5.2011. In a number of judgements, the CESTAT has held that guest house maintenance service and outdoor catering service in the guest house are eligible for credit. - appellant is eligible for credit on guest .....

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Sulekha Beevi C.S. These appeals have been filed challenging the impugned order which denied credit on outdoor catering services. Appeal No.E/52963 to 52965/2014 pertain to the outdoor catering service for the period September, 2011 to August, 2012. The appeal No.E/52966/2014 pertain to the guest house maintenance service and outdoor catering used for the period January, 2008 to December, 2011. 2. The appellants are engaged in the manufacture of aerated water and mineral water and are also avai .....

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caterer. This facility is provided because there are no proper facility outside in or around the factory. Thus in the absence of this arrangement, the workers will be required to go out of the factory in search of cooked food which will result in waste of productive time. That these services are essential and directly used in or in relation to the manufacture of final products. It is submitted that though in the definition of input service with effect from 1.4.2011, services provided in relatio .....

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consumption of employee. These services when availed on the occasion of family day celebration, farewell of employees, etc. would become services for personal use or consumption of employee. When outdoor catering services are provided under obligation of the Factories Act, the activity has a direct bearing on manufacturing activity. As such, these services become integrally connected to the activity of manufacture and also forms part of value of final products. That credit of service tax paid on .....

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catering services are availed for providing food to the employees staying in the guest house. The learned counsel relied on the jugements rendered in CCE, Nagpur vs. Ultratech Cement Ltd.-2010 (20) STR 577 (Bom), CCE, Ahmedabad vs. Ferromatric Millacron India Ltd.-2011 (21) STR 8 (Guj.), CCE, Meerut-II vs. Hindustan Coca Cola Beverages Pvt.Ltd.-2011 (274) ELT 196 (Tri.-Del.), NTF India Pvt.Ltd. vs.CCE, Delhi-III-2013 (30) STR 575 (Tri.-Del.), CCE, Bangalore vs. Stanzen Toyotetsu India (P) Ltd.- .....

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house maintenance has no direct nexus with the activity of manufacture. 5. Heard both sides. 6. After amendment of the definition of input service with effect from 1.4.2011 the exclusion part of the definition takes in outdoor catering service also. But it is provided therein that the exclusion applies when such services are used primarily for personal use or consumption of any employees. The outdoor catering service/canteen services provided by the appellant is in compliance of mandatory requi .....

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rticular service not mentioned in the definition clause is utilised by the assessee/manufacturer and service tax paid on such service is claimed as Cenvat credit, the question is what are the ingredients that are to be satisfied for availing such credit. If the credit is availed by the manufacturer, then the said service should have been utilized by the manufacturer directly or indirectly in or in relation to the manufacture of final products or used in relation to activities relating to busines .....

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ploying more than 250 workers is mandatorily required under the provisions of the Factories Act, 1948 to provide canteen facilities to the workers. Failure to do so entails penal consequences under the Factories Act, 1948. To comply with the above statutory provision, the assessee had engaged the services of a outdoor caterer. Thus, in the facts of the present case, use of the services of an outdoor caterer has nexus or integral connection with the business of manufacturing the final product nam .....

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ly has been used for keeping the factory premises neat and clean which is a statutory requirement of Section 11 of the Factories Act, 1948. In view of this, the service have to be treated as services used by the manufacturer in or in relation to the manufacture of final product as without compliance with the provisions of the Factories Act, manufacturing operations are not possible. In view of this, we hold that housekeeping service is also eligible for Cenvat credit during the period of dispute .....

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ut service. When the Government has specifically used the words such as used primarily for personal use or consumption of any employee, the same has to be given due effect to. In the present case the outdoor catering service is used in relation to business activities of the appellant and the service is used by all employees in general. Also, the Revenue has not rebutted the contention of the Appellant, that the costs of these input services form part of the cost of final product. I also find t .....

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n the present case, the cost of such services, are admittedly borne by the company and not by the employee. Therefore, I hold that the appellant has correctly claimed the cenvat credit on outdoor catering services. Accordingly, the impugned orders are set aside and the appeals are allowed with consequential relief, if any. 9. In the light of the facts, foregoing discussion and judicial pronouncement on the issue, I fully agree with the view taken by CESTAT, Mumbai Bench in the appellants own ca .....

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