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Credit of service tax paid on outdoor catering services, life insurance services after 01/04/2011 being services received for personal use of employees cannot be allowed.
Facts
CENVAT credit is denied to the Appellants on service tax charged on outdoor catering and life insurance services received after 01/04/2011 contending that after the amendment to the definition of input service, services used primarily for personal use or consumption of any employee are specifically excluded and therefore credit cannot be allowed. It was argued that such services were in relation to the business activity and were included in the value of service rendered by them. Reliance was placed on the decision of Hindustan Coca Cola Beverages Pvt. Ltd vs. Commissioner of Central Excise [2014]-TIOL-2460-CESTAT-MUM] (digest provided in BCAJ February 2015).
Held
The Tribunal however, distinguished the decision of Hindustan Coca Cola (supra) by holding that the services of outdoor catering and life insurance are essentially for the personal use or consumption of the employees and therefore could not be allowed. It was also categorically provided that if outdoor catering services are used for an annual conference of dealers or shareholders meet etc., it would be eligible for credit since then it is not primarily for personal use of employees. Similarly, life insurance is also for the personal use of the employee as its benefit goes to the employee or his family. Accordingly the appeal was dismissed.
