Custom, Excise & Service Tax Tribunal
M/S. Fiem Industries Ltd vs Cce & St, Chennai-Iii on 14 March, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/42393/2014
(Arising out of Order-in-Appeal No. 164/2014 (P) dated 05.08.2014 passed by the Commissioner of Customs, Central Excise and Service Tax (Appeals), Chennai-III).
M/s. Fiem Industries Ltd. : Appellant
Vs.
CCE & ST, Chennai-III : Respondent
Appearance Shri Saiprashant, Adv., for the Appellant Shri S. Mohan, AC (AR), for the Respondent CORAM Honble Shri P. K. Choudhary, Judicial Member Date of Hearing/Decision: 14/03/2016 FINAL ORDER No. 40615 / 2016 M/s. Fiem Industries Ltd., Unit-III, Hosur, the appellant herein are the manufacturers of automobile components under Chapter 87 of the first schedule to CETA, 1985. The appellant Company has 3 units at Hosur and other units at Mysore, Delhi, Rajasthan and Himachal Pradesh. All the units at Hosur employ more than 250 persons and have a separate factory canteen. For this, they have availed the services of Outdoor catering to provide food to their workers and staff. The period in dispute is January, 2011 to March, 2011 and the amount of Cenvat Credit is Rs. 54,169/-.
2. A Show Cause Notice was issued to the appellant alleging that Cenvat Credit on outdoor catering services appears tobe ineligible input services since the said service was not used in or in relation to the manufacture of final products and the service is also not covered under the inclusive clause of the definition under Rule 2 (l) of CCR, 2004. The adjudicating authority vide OIO No. 33/2012 dated 03.04.2012 disallowed the Cenvat credit of Rs.54,169/- along with interest and also imposed a penalty of Rs.5,400/- under Rule 15. On appeal, the Ld. Commissioner (Appeals) upheld the OIO and rejected the appeal. Being aggrieved by the Order of the Commissioner (Appeals), the present appeal has been filed before this Tribunal.
3. The appellant Company is represented by Shri Saiprashanth, Advocate, and he submitted that since all the employees are engaged in the activities relating to manufacture and clearance of excisable goods from the factory, the services of outdoor catering for providing food to their employees are used in or in relation to the manufacture of final products. He further submits that in terms of the provisions of Factories Act, 1948 and the Tamilnadu Factories Rules, it is a statutory obligation to provide canteen facilities to the employees of the organization. He also submits that the cost of the food forms part of the expenditure incurred by the appellant and will have a bearing on the cost of production. He vehemently puts forth that the services of outdoor catering received by the appellants qualify as input service as defined in the Rules and availing of credit in order.
4. The Department is represented by Shri S. Mohan, AC(AR), reiterated the findings in the OIA and submits that both the lower authorities have rightly held the impugned input service is ineligible in view of the decision of the Apex Court in the case of Maruti Suzuki Ltd. Vs. CCE, Delhi-III - 2009 (240) ELT 641 (SC) and the LB decision in the case of Vandana Global Ltd. Vs. CCE, Raipur 2010 (253) ELT 440 (Tri.-LB).
5. Heard both sides and on perusal of records, I find that the issue in this appeal lies on a narrow compass of liability of outdoor catering service as input service claimed by the appellants for the period January, 2011 to March, 2011. The issue on eligibility of Cenvat credit on outdoor catering is covered by the judgment of the jurisdictional High Court in the case of Dalmia Cements Ltd. Vs. Dy. Commissioner of Central Excise, Trichy 2015 (39) STR 982 and for the very same assesse vide Final Order No. 40024/2016 dated 05.01.2016, this Tribunal has allowed the benefit of input service credit. The judgments in the case of Maruti Suzuki Ltd and in the case of Vandana Global Ltd. (supra) dealt with an altogether different situation and therefore inapplicable to the facts of the present case. In view of the above, the impugned order is set aside and the appeal is allowed.
(Operative part of the Order Pronounced in the open court on 14.03.16) (P.K. CHOUDHARY) Judicial Member BB 1