M/S Windsor Machines Ltd vs Commissioner, Central Excise & Service ...

Appeal No.E/802,803/2012 [Arising out of OIA No.59-60-2012-AHD-I--CE-SKS-COMMR-AAHD, dt.16/08/2012, passed by Commissioner (Appeals), Central Excise & Customs, Ahmedabad-I]

M/s Windsor Machines Ltd Appellant

Vs

Commissioner, Central Excise & Service Tax, Ahmedabad-I Respondent

Represented by:

For Appellant: Shri P.G. Mehta, Advocate For Respondent: Shri Jitendra Nair, Authorised Representative

For approval and signature:

Honble Mr. H.K. Thakur, Member (Technical)

1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of Seen the order?

4. Whether order is to be circulated to the Departmental Yes authorities?

CORAM:

HONBLE MR. H.K. THAKUR, MEMBER (TECHNICAL)

Date of Hearing/Decision:09.06.2015

Order No.A/ 10778-10779/2015, dt.09.06.2015

Per: H.K. Thakur

These appeals have been filed by the Appellant with respect to OIA No.59-60-2012-AHD-I--CE-SKS-COMMR-AAHD, dt.16.08.2012 passed by the First Appellate Authority. The issue involved in both these appeals is regarding the admissibility of CENVAT Credit of Catering/Canteen services availed by the Appellant.

2. Shri P.G. Mehta, learned Advocate appearing on behalf of the Appellant argued that Appeal No.E/803/2012 is with respect to the demand decided as a result of remand proceedings ordered by this Bench under Order No.A/A/1319/WZB/AHD/2011, dt.25.07.2011. The learned Advocate made the Bench go through Para 3 & 4 of the order dt.25.07.2011 passed by this Bench to argue that the entire cost of the services has been incurred by the Appellant. Therefore, entire Service Tax credit is admissible to the Appellant in view of Hon'ble Mumbai High Court Order in the case of Ultratech Cement Ltd [2010-TIOL-745-High Court-MUM-ST]. It was his case that a certificate issued by Chartered Accountant was also produced before the lower authorities, but the same has not been considered by the lower authorities on the ground that the certificate provided is not clear in its contents. He made the argument that as per this certificate dt.23.07.2011 issued by the Chartered Accountant the entire canteen expenses of Rs.10,12,604.00 are included in the employee cost of Rs.10,35,42,620.00 as per Schedule T and that the same is forming a part of production cost of the Appellant. The Appellants also relied upon the observations of this Bench in Stay Order No.M/10290-10291/WZB/AHD/2013, dt.04.01.2013, in these appeals wherein it is mentioned that the entire canteen expenses for the relevant year have been included in the employee cost and that a certificate issued by a competent Chartered Accountant cannot be doubted without any contrary evidence. The learned Advocate also relied upon the discussions and the findings portion of the OIO No.MP/13/DEM/AC/2011, dt.23.11.2011, wherein it has been held by the Adjudicating authority that as per the canteen contract all expenditure towards lunch/dinner and tea are borne by the Appellant which is confirmed by the Chartered Accountant certificate dt.23.07.2011. That after verification of the said facts, the Adjudicating authority dropped the proceedings under the show cause notice dt.05.05.2010. That there is no evidence available on record that any amount has been recovered from the employees towards the cost of food supplied by the Appellant.

3. Shri Jitendra Nair, Authorised Representative appearing on behalf of the Revenue relied upon the Hon'ble Mumbai High Court order in the case of CCE Nagpur Vs Ultratech Cement Ltd [2010 (260) ELT 369 (Bom.)] and argued that invariably a nominal portion of the cost of food supplied to the employee is recovered and entire cost of food is not borne by the Appellant. That as per the Hon'ble Mumbai High Court order in the case of Ultratech Cement Ltd (supra), proportionate credit embedded in the cost of food recovered from the employee is required to be reversed.

4. Heard both the sides and perused the case records. The issue involved is regarding the admissibility of CENVAT Credit on canteen/catering services and has been settled by the Hon'ble Mumbai High Court in the case of CCE Nagpur Vs Ultratech Cement Ltd (supra). The matter was remanded earlier to the Adjudicating authority in the case of present Appeal No.E/803/2012-SM as per Order No.A/1319/ WZB/AHD/2011, dt.25.07.2011 for verifying the claim of the Appellant as per Chartered Accountants certificate to the effect that no amount has been recovered from the employee of the Appellant. After due verification, the Adjudicating authority vide Order dt.23.11.2011 held that no amount has been recovered by the Appellant from its employees and accordingly dropped the proceedings by accepting the Chartered Accountants certificate. It is observed from the judgment of Hon'ble Mumbai High Court in the case of Ultratech Cement Ltd (supra) that in that case, the Appellant filed an affidavit regarding reversal of proportionate credit embedded in the cost of food recovered from the employees, whereas in the present case the Appellant had produced a Chartered Accountants certificate to the effect and claimed that no amount has been recovered from the employees. The argument of the Revenue that in such cases, a nominal cost is always recovered from the employees is without any basis and is totally based on assumption. Once the Appellant had produced a Chartered Accountants certificate from the competent authority and claimed that no cost of food recovered from its employees, then the same cannot be brushed aside by the Revenue on a presumption without taking any alternative opinion from an expert that such a cost has been recovered from its employees. No documentary evidence has been brought on record by the Revenue that some portion of the cost of food supplied by the Appellant is recovered from the employees. In the present factual matrix, the case law of Hon'ble Mumbai High Court in the case of CCE Nagpur Vs Ultratech Cement Ltd (supra) is not applicable as there is no evidence on record that any amount is recovered by the Appellant from its employees towards the cost of food. Accordingly, it is held that the entire Service Tax credit is admissible to the Appellant and the order passed by the First Appellate Authority is required to be set aside.

5. In view of the above observations, the appeals filed by the Appellant are allowed with consequential relief, if any.

(Dictated and pronounced in Court)

(H.K. Thakur) Member (Technical)

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