Relief for Mahindra: CESTAT Rules CENVAT Credit on Factory Canteen Services Admissible Except for Employee-Recovered Amounts

Mahindra has received relief from CESTAT, which ruled that "CENVAT credit on factory canteen services is admissible," except for amounts recovered from employees. The tribunal's decision clarifies a long-standing point of contention between taxpayers and tax authorities. The ruling reinforces that a business can claim CENVAT credit for services that are essential for its operations, as long as the cost is not recovered from the employees.