Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench At Chennai

Wendt (India) Ltd. V. Commissioner of Central Excise, Chennai

Appeal No. E/80/12 [Arising out of Order-in-Original No.51/2011 dated 25.10.2011 passed by the Commissioner of Central Excise, Chennai]. 29-08-2012

JUDGMENT

The appellants are in appeal against the impugned order wherein input service credit availed by them on outdoor catering service was denied on the ground that the same is not covered under the definition of Rule 2(l) of CENVAT Credit Rules, 2004.2. The adjudication took place and the Commissioner observed that CENVAT Credit Rules, 2004 were notified vide Notification No.23/04-CE (NT) dt. 10.9.2004 which was issued in exercise of the powers conferred by Section 37 of the Central Excise Act, 1944 and Section 94 of the Finance Act, 1994. He further observed that no rule can so be interpreted as to take this scope beyond the power under which that Rule has been made. Therefore, input service credit was denied as the same has not been availed by the appellant in relation to the manufacture of the final product. It was further observed by the Commissioner that these activities are only for the welfare of the employees. Therefore, they are not entitled for CENVAT credit.

3. Examined the impugned order and as per Rule 2(l) of CCR 2004, it is clearly mentioned that any input service is eligible for CENVAT credit which has been used by the assessee in the course of their business of manufacture. The said interpretation has been given by the Hon’ble High Court of Bombay in the case of CCE Nagpur Vs Ultratech Cement Ltd. 2010 (260) ELT 369 (Bom.). As per the said definition, the appellants are entitled for input services credit on outdoor catering services as the same has been availed by them in the course of their business of manufacture. The observation made by the learned Commissioner that the Rules are to be interpreted as per the provision of the Act are not in keeping with the interpretation as given by the Hon’ble High Court of Bombay in the case of Ultrtech Cement (supra). Therefore, as held by the Hon’ble High Court of Bombay in the case of Ultratech Cement (supra), the appellants are entitled for input service credit on outdoor catering services. With these observations, the appeal is allowed and the impugned order is set aside.

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