[2016-TIOL-2223-CESTAT-HYD] M/s. Hindustan Coca Cola Beverages Pvt. Ltd. vs. CCE, Hyderabad-I

Facts:
The Appellant manufacturer availed CENVAT credit on outdoor catering services post April 2011. The department contended that post the said date these services are excluded from the definition of input service and therefore the credit is inadmissible. It was argued that only services which are used primarily for personal use or consumption of any employee are excluded whereas in the present case the services are provided within the factory premises as per the statutory requirement imposed by the Factories Act, 1948 and further the unit is located away from the city and therefore non-provision of food will directly impact the production.
         
Held:
The Tribunal observed the term ‘primarily’ in the exclusion clause and noted that the word means most proximate or important. However in the present case the service is most importantly used to comply with the requirements under the factories act failing which they will not be able to engage in production/manufacture of final products. Accordingly it was held that services are used in relation to the business of manufacture and not for any personal use or consumption of the employee and therefore the credit is allowed.  

[Note: Readers may note a similar decision in the case of Gateway Terminals (I) P. Ltd vs. Commissioner of Central Excise, Raigad [2015-TIOL-1471-CESTAT-MUM] digest provided in August 2015 wherein the Tribunal noted that provision of canteen facilities being a statutory obligation is a part of the business need and accordingly credit was allowed.]