Custom, Excise & Service Tax Tribunal
Commissioner, Central Excise & Service ... vs M/S Lupin Ltd on 31 December, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. E/37/11-Mum [Arising out of Order-in-Appeal No. RT/49/LTU/MUM/2010 dated 13/10/2010 passed by the Commissioner (Appeals), Central Excise & Service Tax, LTU, Mumbai] For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
=======================================================
Commissioner, Central Excise & Service Tax (LTU), Mumbai
:
Appellant
VS
M/s Lupin Ltd.
:
Respondent
Appearance
Shri R.K. Maji, A.C. (AR) for the Appellant
Shri Sachin Chitnis, Advocate for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 31/12/2015
Date of decision: 31/12/2015
ORDER NO.
Per : Ramesh Nair
The appeal is directed against Order-in-Appeal No. RT/49/LTU/MUM/2010 dated 13/10/2010 passed by the Commissioner (Appeals), Central Excise & Service Tax, LTU, Mumbai, wherein the Ld. Commissioner rejected the appeal filed by the revenue by upholding the Order-in-Original.
2. The issue involved in the present case is that whether cenvat credit is admissible on input service namely outdoor catering service.
3. Shri R.K. Maji, Ld. A.C. (AR) appearing on behalf of the revenue submits that both the lower authorities had allowed the cenvat credit relying upon the judgment of GTC Industries Ltd. - [2008 (12) STR 468 (Tri.-LB)] wherein the Larger Bench held that credit on outdoor catering service is admissible even though the cost of food partly recovered from employees. In the subsequent judgment of the Honble Bombay High Court in the case of CCE, Nagpur vs. Ultratech Cement Ltd. [2010 (20) STR 577 (Bom.) it was held that if the part of the catering cost recovered from the employees, cenvat credit attributed thereto is not admissible. In view of the judgment of Honble Bombay High Court, cenvat credit is not admissible, if the cost of catering charges is recovered from employees.
4. On other hand, Shri Sachin Chitnis, Ld. Counsel for the respondent submits that there is no allegation in the show cause notice that cost of food recovered from the employees, therefore the revenue cannot raise this issue at this stage. He further submits that in principle, cenvat credit is admissible on outdoor catering service as it is held by Tribunal and High Court in various judgments. Credit should be allowed without going into the ratio of cost of catering service born by respondent or their employees. In support of his argument, he placed reliance on the following judgments:
(i)- Commr. of C.Ex., Aurangabad Vs GKN Sinter Metals Ltd. - [2011-TIOL-332-CESTAT-MUM]
(ii)- Commr. of C.Ex., Nagpur Vs Indoworth (I) Ltd. - [2011-TIOL-682-CESTAT-MUM]
(iii)- Commr. of C.Ex., Aurangabad Vs Cummins Generator Technologies India Ltd. - [2013-TIOL-105-CESTAT-MUM]
5. I have carefully considered the submissions made by both the sides.
6. I find that it is settled that outdoor catering service is an admissible input service, however credit can be allowed only on the portion of cost which is born by the manufacturer. The cost which is recovered from the employees, cenvat attributed to that portion cannot be allowed as held by the Honble Bombay High Court in the case of Ultratech Cement Ltd. (supra). The fact that whether the cost was recovered from the employees and quantum thereof, was not considered by lower authority, therefore the matter needs to be remanded to verify this fact. As regard the judgments relied upon by the Ld. Counsel on the issue that the fact whether the cost of food recovered from the employees or otherwise was not raised in the show cause notice, same cannot be raised at this stage. I find that the issue raised in the show cause notice is admissibility of cenvat credit on the outdoor catering service. As regard the cost of food recovered from the employees, it only decides the quantum of the cenvat credit which is admissible. Therefore, in my considered view, it is not a fresh issue as the same coexists in the issue of admissibility of cenvat on outdoor catering service. Moreover the judgment of Ultratech Cement squarely covered the issue, accordingly I do not agree with the Ld. Counsel on the point that it is a fresh issue which was not covered in the show cause notice and raised first time at this stage. As per the above discussion, I remand the matter to the adjudicating authority to quantify the actual credit allowable to respondent as per my above observation.
Looking to the nature of the issue as same involved interpretation of cenvat credit provision that whether the outdoor catering service is an input service or otherwise, the respondent cannot be penalized. Needless to say that the respondent be given sufficient opportunity of hearing before denovo adjudication.
7. The Appeal is disposed of in above terms by way of remand.
(Dictated in court) Ramesh Nair Member (Judicial) saifi 5 Appeal No. E/37/11-Mum