2018 (6) TMI 1407 – CESTAT HYDERABAD – TMI – CENVAT credit – input services – food provided to the workers outsourced by the appellant – whether or not the credit of service tax on outdoor catering services should be allowed in view of the statutory requirement under the Factories Act? – Held that:- Tribunal being a creation of law, has no power to amend, enlarge, restrict or otherwise modify the Act or Rules. This position does not change even if the appellant has an obligation under the Factories Act or any other law and Tribunal cannot enlarge the scope of CENVAT Credit Rules.
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The matter should be referred to Hon'ble President for constituting a Larger Bench to resolve the issue – matter referred to Larger Bench. – Appeal No. E/31224/2017 – IO/27/2018 – Dated:- 17-5-2018 – Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Y. Srinivasa Reddy, Advocate for the Appellant. Shri Das Thavanam, Superintendent/AR for the Respondent. [Order per: P.VENKATA SUBBA RAO] 1. Heard both sides and
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pears that the canteen contractor is paid by the man power service provider for the subsidised food although it is not evident from the records. In turn, the man power service provider bills the appellant for the food subsidy including the service tax thereon. The issue in dispute is the credit of the service tax element on this food subsidy. It is the case of the Revenue that this food subsidy amounts to outdoor catering services for employees and the credit of the service tax thereon is inadmissible in view of the specific exclusion in the Rules. The appellant argued that although it is called food subsidy, in fact, it is manpower outsourcing service and it is also a component of the charges paid to the manpower supplier. The department, on the other hand, argues that the bill is raised specifically for food subsidy which is provided by outside canteen contractor and paid for by the appellant. Although the beneficiaries of the food subsidy are not regular employees of the appellant,
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matter was referred to Hon'ble President for constituting Larger Bench to resolve the conflict between the decisions of different Benches. Hence, this case should also be referred to Larger Bench. 3. I have gone through the records of the case and I find one of the elements to be decided is whether or not the credit of service tax on outdoor catering services should be allowed in view of the statutory requirement under the Factories Act. This was specifically argued by the appellant. I am of the view that the Tribunal being a creation of law, has no power to amend, enlarge, restrict or otherwise modify the Act or Rules. This position does not change even if the appellant has an obligation under the Factories Act or any other law and Tribunal cannot enlarge the scope of CENVAT Credit Rules. However, as the case of Wipro Limited (supra) has been referred to Larger Bench, I find no reason to take a different stand in this case. Accordingly, I find that the matter should be referred to
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