Outdoor catering & Cenvat credit

A larger bench of the Service-Tax Tribunal has held that the service provided by an outdoor caterer, in the canteen of a manufacturer, within the factory premises, should be considered as being in relation to business and hence should qualify as ���input service��� with respect to which Cenvat credit would be admissible.

The assessee received services of an outdoor caterer and availed Cenvat credit of the service tax paid on such services. The assessee contended that the definition of the term ���input service��� is an inclusive definition. The word ���includes��� used therein enhances the scope of the definition. The phrase ���activities relating to business��� has a wider meaning, thus encompassing all those activities also that are received in relation to the functioning of the business. The term ���such as��� connotes that the activities relating to business mentioned in the definition, are only illustrative in nature.

The department sought to deny the credit so availed by the assessee and raised the contention that the inclusive part of the definition of ���input service��� is exhaustive in nature and should be restricted to the activities specifically mentioned in the definition of ���input services���. The catering service not being specifically mentioned under the said definition cannot be classified as ���input service���.

The tribunal accepting the assessee���s contention held that the term ���includes��� enlarges the scope of the definition. Hence, canteen services received by the assessee for providing food to workers should be considered as being in relation to business and thus entitled to credit.