Karnataka High Court
The Commissioner Of Central Excise And ... vs M/S Ace Designers Ltd on 8 April, 2011
Bench: N.Kumar, Ravi Malimath
IN THE HIGH COURT OF K,A,RNAT.zsJ_<}éaV.AT 85.5:-'§Xi€:AiEOR3E."'~
DA ED THE TH 8*""=r_>" OF "AER'*L
THE HON BV!_'E..V_ff"1RAI._\]3!57:":;V ._ KUMAR
N' ':"I*'<~' R"o'?I-M*--{.IMATH
THE HO vBLEE!gfi.uV'C3%,'9V§-'IvC\Fi:.2O;%-'V6. .'.:V-%' _
BETWEEN:
The Commi€s'Sio_ne:bv-o::f_ E;?ci'Ee '
& Service Tax ' '
Large Tva;<pay'e.r U'r~e:§:,?:~V. "
J.S.S. _
Banashankari~£II'Sta.ge_ "
100 Ft. Ring Road _ '
Bangalore -3560 ...APPELLANT
_ A (By . B.h"€iSk§_f_,A Advocate)
Ammo
M;g_, ACE .o:gg;;§ners Ltd,,
Pfot 1\!o.*-Z 8:8, 2" Phase
jg«, '-».Peenya.§_ridl.Area
" 'ugB'a;:gE2iore -~ 560 085. ...RESPONDEi\IT
Ski B,1\L Gururajg Advocate)
>i<>i<>i<Ii.<?%<
This CEA flied under Section 35G of the Central
Excise Act, 1944 arising out of order dated 17.02.2010
passed in Fmat Groer No' 471/2910, praying to decide the
A.
g5::a:'"'"
3,,
questions of law framed therein, set aside the F-'iriai Order
471/201(1) dated 1?'.O2.201O gassed by the CESTAT,
Bangaiore.
This CEA coming on for admissionf'th.isV"ihi:'d'a§'_;'--ié'
Ravi Malimath 3., delivered the foilowing:~ 2
JUDGMENT?
This appeal is by the rexrehue 'beirrg agg»ri"ejQed" the
order of the Tribunal, WhlChuHl§§_E'l'd _thaVt'-the'V':assessee is
entitled to avail CerlV;=:1'\}:'..1,{iCrElj:ltEd'/';'.§§li7dS'.'0UtdOii3|! catering
services.
2. hoajhufaicturer of CNC lathes
and colmpo.h:e~o"ts§:'1:;:, fitiie.....course of audit, it was
rioticed7--.t_hat "availed cenvat credit to the
extent ofllllizs;3.,54,_1VG§l/aiof service tax paid on outdoor
catering__fservices"{Canteen service) during the period April
'2.Vl)G7,7tQ'V4VlVlE§§iT;l'i.._2QO8. Accordingly, a show cause notice
d}:-:.te'd was issued to Show cause as to why the
saidéllanriodrit shouid not be demanded as having been
'A 'V.:i_*tdVroli'z«gly availed by the assessee aiohg with interest and
penalty. The assessee submitted his reply, but however
the Assessing Authority confirmed the demand! interest
i
and penalty. Aggrieved by the same, an appeal"*.was
preferred before the Commissiener of Central
Service Tax, wherein the Appellate Authorityset
order passed by the Assessing
appeal. Aggrieved by the same, theArevenue.--'i:r'e'fei'rre:ié"enVVr
aimeal before the Tribunal."V"i'r».:Ei"he Vlillllacing
reliance on the Larger ifiench Tvriibzjvnai in the
case of cc:-1, Murnbai [.2008 (12) 57/2
468 (Tri.LB)],;_" services availed
by the a canteen in the
ractory§ pte;m§es and the service tax
paid thereon' be taken as cenvat credit.
Acc0rdingly;"it_:V held t'hat"":in View of the ratio of the said
' V' "'--j;.id'g-nnerit, the asséessee is entitled to take cenvat credit on
by them Accordingly; the appeal was
ailAc»i;§_ieclfr-~':lieglVerieved by the same, the revenue has
l""»-'~.__"-»»pAreferre:i'*the present appeal.
Therefere, the question that arises fer
Wcensideratien in this appeal is as to whether the assessee
9%?"
is entitieci ta avaii the cenvat credit for service tax
outdoor catering service.
4. An identical question ca_me...it;pfiv fer "ten-sicive'i=.eitie,n.'
before the Division Bench ei.4__this"'c0"urt: ir:»"Viihe.:'_cas}e
Commissioner of Centrai Excisei"*trs'. iipyotetsu
India (P) Ltd., in CEA 9532009 ~-97/2O€i9,"V98/2009,
99/2009, 124/2009 ape %.%1;2s/goeé'iiiswssaosed off on
08.04.2011. ' 1
5. "VVh:_i_ie_:~_ tii»;e"' issue whether the service;'s""ijtii*i»Si§?d asseissiee is in the course of manufazcturing ofe'j_i'fitiai._:i'pr.0duct or not, the Court held as follows: ' V' t ' ' V' it "As" clear from the definition any used by the manufacturer whether' indirectly in er in relation to the ""i'menefacture of final products constitutes input service. Various services are set out in the e"e-finition expressly, as constituting input it jifgseri/ice. It eiso incfudes transportation of inputs er capital geods and outward transpertation upto the piece 02' remove/. iii"
CANTEEN SERVICE _
10. It is in this context that L" i assessee provides outdoor'-Icenteei-§ faciiifies because of a statutory obiigatior:s.imposeci' on him under Section 46,*o.f. the"Fa'cforieS'V'i'/§ct_Vit . becomes a condition of"'sei*:/ice as._iar."'as employees are cencerneo'.-.. ' -/-ie» _ has a paid the service tax on ozj'ttioor'-.ca?hiteei:fV'is.ei"yi_ces, The said expenses inc11nfedti§'e,'assessee will also be§~vtai<;eh- into _coiisideiation___'before fixing the V-fee' finai'~~.pi*o_o'tict,.' It may be a we/fare.mee.sVo_re it is not a charity pi'ovicieo'vi'by_tVti¢.e em'p.(Qyei" to the empioyees, It Isiah onerous iiegbja/__bo'b[igation imposed on him. I 1;" ~ .._XXXX)=.7XXX XXXXXXXX 'Fherefore, merely because these seizgices are not expressiy mentioned in the V * 4_ definition of input service it cannot be said that they do not constitute input service and the assessee is not entities' te the benefit of CENVAT credit, Ihfact, Rule 3 of the Ceneet RU/SS, 2804,; specificai/y provides that th ii"
manufacturer of fine/' preducts shall be ~ to take credit. The service tax is "
under Section 66 of the Ffnanee' Ac:*"ehd:'_pefdV'_'_A.V on any input service Zzfecelvefkj AA manufacturer of as fihel prohduhet. Therefel'e under the scheme of thefléienveht v(§reQr;gv_:,f2u2;:les;' 2004, the serv/2:e'__ tax peidR:or2_ efllthese' seryiees which the assesse}--3_ hesi V a}t'l-.fi_2eb'~l _d;'rectly or indirectly in or in reletloh'_ th'eVlV"f}*}--'7Ij;':fl__'prociuct is entitled, ciainizh t5¢;;creé'l.f,: V' 'The}*efore, the Judgmelafi lf.'fi_f_l'9'u{_2a;'."Isf.'legalend valid and is in eeCef;:fenee'_ :4/Eh' does not suffer ms léggél .fh5fmityH"'i}%2hich Calls for any ihtefferenteV;'V"-ls.'the substantial questions of law appeals are answered 'age/'ns.LV' V-the' ltrexkenue and in favour of the ' If . . . . . ..' V6.éfififheefefore, the question that arises for cons"%c§.e"%e_tien in this appeal having sifice been answered by V' v~:hf"theh"E)ivision Bench of this Court in the aforesaid judgment, ' this appeal is disposed off an the very same terms as in "'=,i"l<iEA Noses/2ees c/w 97/2099, 98/2009, 99/2009, 1 24/2089 and 1 25/2909.
vie For the aforesaid reasons, the appeat is _ ' _ 3%.
§gagg