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3. The learned Superintendent (AR) submits that the appellant did not employ 250 or more workers in their factory at any point of time during the period of dispute and, therefore, they did not have any statutory obligation to maintain a canteen for the workers and consequently, there is no nexus between the appellants business of manufacture and marketing of excisable products and the use of outdoor catering service for supply of food to the workers. In this connection, reliance is placed on the Honble High Courts judgement in Stanzen Toyotetsu India (P) Ltd. case (paragraph 12). Further, it is pointed out that, in Final Order No. 898/2010 ibid, the number of workers employed by the assessee during the material period was overlooked by the Bench while holding in their favour on the question whether outdoor catering service used in factory canteen for supply of food to the workers could be treated as an input service. With regard to guest house maintenance service, it is submitted that no nexus was found between this service and the manufacture of goods in the case of Hindustan Zinc Ltd. vs. Commissioner [2011 (270) E.L.T. 111 (Tri.-Del.)].

6. As regards outdoor catering service, the above issue was considered by the Tribunals Larger Bench in GTC Industries case. One of the reasons stated by the Bench for finding nexus between outdoor catering service and the manufacturing activity of the assessee was that the cost of subsidised food supplied by them to workers in the factory canteen by the use of outdoor catering service was included in the cost of production of excisable goods in the factory. The second reason noted by the Bench was that it was mandatory for a factory having more than 250 workers to provide canteen facility within the factory premises under Section 46 of the Factories Act, 1948. The cumulative effect was that the requisite nexus was found between outdoor catering service and the manufacturing activity and, accordingly, the former came to be recognised as an input service. The decision of the Larger Bench in GTC Industries Ltd. case was upheld by the Honble Bombay High Court (Nagpur Bench) in the case of Commissioner vs. Ultratech Cement Ltd. [2010 (260) E.L.T. 369 (Bom.)]. This apart, the Honble Karnatake High Court, in paragraph 12 of its judgement in Stanzen Toyotetsu India (P) Ltd. (supra), highlighted the statutory obligation of a factory (employing more than 250 workers) under Section 46 of the Factories Act and proceeded to determine whether the assessee discharged such obligation so as to claim nexus between outdoor catering service (canteen service) and their manufacturing activity. The said paragraph 12 reads thus :

It is in this context that when the assessee provides outdoor canteen facilities because of a statutory obligation imposed on him under Section 46 of the Factories Act, it becomes a condition of service as far as the employees are concerned. He has paid the service tax on outdoor canteen services. The said expenses incurred by the assessee will also be taken into consideration before fixing the price of the final product. It may be a welfare measure but certainly it is not a charity provided by the employer to the employees. It is an onerous legal obligation imposed on him. The cost incurred in rendering such service will be included in the cost of production. Thus, what emerges from the Bombay High Courts judgement in Ultratech Cement Ltd. case and the Karnataka High Courts judgement in Stanzen Toyotetsu India (P) Ltd. case is that there is a nexus between outdoor catering service (canteen service) and manufacturing activity where the canteen service is provided by the manufacturer in discharge of the statutory obligation under Section 46 of the Factories Act and the cost of such service is factored into the cost of production of the final product. In the instant case, admittedly, the appellant did not have any statutory obligation to provide canteen service during the period of dispute inasmuch as they employed less than 250 workers during that period. Had the appellant employed more than 250 workers in their factory during the said period, they would have contended to that effect in their reply to the show-cause notice. Such contention would have been raised in defence vis-`-vis the departments allegation that the outdoor catering service used by them in the factory canteen was not an input service. Therefore, the submission of the learned consultant that the number of workers was not mentioned in the show-cause notice and, hence, the status of input service cannot be denied to outdoor catering service on the basis of the number of workers cannot be accepted. I reiterate that the number of workers, if more than 250, is a defence vis-`-vis the show-cause notice in this case, rather than a ground for the show-cause notice itself.

7. The reliance placed on Final Order No. 898/2010 ibid (which was passed in the assessees own earlier case) does not improve their present case inasmuch as, in that case, CENVAT credit was allowed on outdoor catering service overlooking two crucial points. Firstly, it was the submission of the JDR representing the respondent that the assesssee (appellant) did not have more than 250 workers in their factory and hence CENVAT credit could not be allowed. The veracity of this submission was not examined. Secondly, while claiming support from the Tribunals Larger Bench decision in GTC Industries Ltd. (supra), this Bench overlooked the fact that the Larger Bench had indeed factored the number of workers also in its decision to hold that the assessee (GTC Industries Ltd.) succeeded in establishing nexus between outdoor catering service and manufacturing activity. Therefore, Final Order No. 898/2010 is not a good precedent for the present case.