Under the provisions of section 46 of the Factories Act, it is mandatory for the employer to provide canteen services to the staff. Thus, provision of canteen services is a statutory requirement. Provision of canteen services being indispensable, it is incumbent on a manufacturer of goods, to provide the same if he desires to run his factory. In view of the definition of Input service which means any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products, the input service does not have to used directly in the manufacture of final products, it may be a service which is only indirectly used in relation to the manufacture of final products. In the circumstances, canteen services which are indispensable in relation to manufacture of the final products would certainly fall within the ambit of input service as defined under the Rules.
IN THE HIGH COURT OF GUJARAT
AT AHMEDABAD
TAX APPEAL No. 736 of 2009
COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD- I
Vs
FERROMATIK MILACRON INDIA LTD.
Dated: April 1, 2010
JUDGEMENT
Per : H N Devani:
1. Appellant Revenue has challenged order dated 28 th November, 2008 made by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) proposing the following two questions stated to be substantial questions of law:-
Whether the canteen service/ facility, provided in the factory of the assessee was an input service, in or in relation to manufacture, directly or indirectly of the final products, within the meaning and comprehension of Rule 2(i) of the CENVAT Credit Rules, 2004?
