2013 (12) TMI 962 - AT - Service Tax

Demand of service tax - Outdoor Catering Service - Vat paid on services - Assessee claimed that since VAT has been paid therefore they are not liable to pay service tax - Held that - other part of Outdoor Catering was the service rendered by the assessee in bringing the food articles to a place designated by the client and that the service so rendered by the assessee which included the cost of transporting the food articles constituted taxable service - appellant has prima facie case against the demand of service tax under the head in respect of the cost of food items - Following decision of Commissioner of Service Tax v. LSG Sky Chefs (India) Pvt. Ltd. 2011 (4) TMI 911 - KARNATAKA HIGH COURT - stay granted.

Summary

Issues:
1. Waiver and stay sought for adjudged dues including service tax and penalties.
2. Liability for service tax on "Outdoor Catering Service" activities.
3. Dispute regarding "dry cleaning" services and payment of service tax under a different head.

Analysis:
1. The application before the tribunal sought waiver and stay concerning adjudged dues, including a demand for service tax and penalties. The tax demand in question amounted to Rs. 39,75,715/- covering the period from 10-9-2004 to 31-3-2008, specifically related to "Outdoor Catering Service." The appellant contended that since they had already paid VAT on food items sold to airlines, they should not be liable for service tax on this aspect of their operations. Citing a relevant High Court judgment, the appellant argued that the service provided in transporting food articles to designated locations constituted taxable service. After due consideration, the tribunal found merit in the appellant's case against the service tax demand concerning the cost of food items.

2. Moving on to the next issue, the tribunal addressed the aspect of "dry cleaning" services. The appellant denied providing dry cleaning services, asserting that they only performed wet cleaning. Additionally, they claimed to have paid service tax on the taxable value under a different category. Upon reviewing the records, the tribunal acknowledged the correctness of the appellant's submission regarding the nature of cleaning services provided. Consequently, the tribunal found prima facie merit in the appellant's position on this matter as well.

3. Considering the arguments presented and the evidence reviewed, the tribunal concluded that the appellant was entitled to waiver and stay on the merits of the case. Therefore, the tribunal granted a waiver of pre-deposit and ordered a stay of recovery concerning the adjudged dues, taking into account the appellant's contentions and the prima facie validity of their positions on both the liability for service tax related to food items and the nature of cleaning services provided by the appellant.

This detailed analysis of the judgment highlights the tribunal's considerations and findings on the issues raised by the appellant regarding service tax liabilities and cleaning services, ultimately leading to the decision to grant waiver and stay in favor of the appellant based on the prima facie validity of their contentions.