2010 (9) TMI 593 - AT - Service Tax

Exemption - Outdoor catering services - The proprietor has stated that he is engaged in rendering outdoor catering service to corporate customers - Deposition of customers that food served and bills raised and that no amount paid as Service tax - The proprietor of the appellant has also admitted that he was engaged in rendering outdoor catering service to the customers - In the face of the above admission, the plea of the assessees that they only supplied food items to their customers office premises and that such delivery is not subject to service tax, as per para 11.4 of Ministry of Finance Circular No. 80/10/2004-S.T., dt. 17-9-2004 is not tenable - Benefit of exemption under Notification No. 12/03-S.T., dt. 20-6-03 is also not acceptable in the absence of indication of value of goods and materials sold in the documents issued for providing taxable service. Exemption denied on the ground that the expression food means a substantial and satisfying meal , and hence wherever the service provider has supplied items other than meals, the condition stipulated in the notification is not satisfied, a perusal of the bills shows that they have been issued for meals also such as breakfast/lunch/dinner - Therefore, The claim to the benefit of this notification is required to be examined with reference to the bills of the assessees - Remit the issue for fresh decision to the adjudicating authority,

Summary

Issues:
Demand of service tax and education cess on outdoor catering services, challenge to penalty amount, interpretation of relevant notifications for exemption.

Analysis:
The Appellate Tribunal CESTAT, CHENNAI dealt with a case involving the demand of service tax and education cess on outdoor catering services provided by the appellants during a specific period. The tribunal considered the appellant's expansion from indoor to outdoor catering services, catering to corporate customers like M/s. HCL Infosystems Ltd., M/s. Cooper Bussmann India (P) Ltd., and M/s. L&T Ltd. The appellant claimed they only supplied food items to the customers' office premises, arguing that such delivery is not subject to service tax. However, the tribunal found this argument untenable in light of the appellant's admission of engaging in outdoor catering services. Additionally, the appellant's claim for exemption under Notification No. 12/03-S.T. was rejected due to the absence of value indication in the documents issued for taxable services.

Regarding the appellant's claim for a 50% exemption under Notification No. 20/2004-S.T., the tribunal noted the denial based on the interpretation that "food" meant "a substantial and satisfying meal." However, upon reviewing the bills issued by the appellants, which included charges for meals like breakfast, lunch, and dinner, the tribunal decided to set aside the denial of the benefit under this notification. The tribunal directed the issue to be remitted to the adjudicating authority for a fresh decision based on a thorough examination of the appellant's bills to ascertain whether the items supplied indeed qualified as "food" as per the notification.

In conclusion, the tribunal disposed of the appeal by setting aside the denial of the benefit under Notification No. 20/2004 and remitting the issue for further examination. The judgment was pronounced in open court on 13-9-2010 by Ms. Jyoti Balasundaram, JJ.