2014 (1) TMI 559 - AT - Service Tax

Waiver of of pre-deposit of Service Tax - Classification of service - Catering service or not - Held that - prima facie, putting together different items of food in one tray does not amount to manufacture. The appellants are not giving any impression that the items like cheese, jam etc. are manufactured by the appellants. Thus, we do not see any ground for demanding excise duty for the activity of putting together different items of food in a tray and serving it with their label. Their name card put in the cutlery package can at best convey a message that catering is done by the Appellants and not that the goods are manufactured by the Appellants - Following decision of M/s. Taj Sats Air Catering Ltd. 2012 (11) TMI 354 - CESTAT, NEW DELHI - Stay granted.

Summary

Issues:
1. Whether the appellants are liable to pay excise duty on the items served in trays with their label during flight catering activities.

Analysis:
The case involved a dispute regarding the liability of flight caterers to pay excise duty on items served in trays with their label during flight catering activities. The appellants argued that they were not engaged in further manufacturing activities during flights and were already paying duty on items made in their factory. The Revenue contended that the trays with a brand name constituted a manufactured product under a specific sub-heading of the Central Excise Tariff.

The Tribunal considered the arguments presented by both parties and analyzed the nature of the activities carried out by the caterers. It was observed that combining different food items in a tray did not amount to manufacturing. The Tribunal noted that the appellants did not claim to have manufactured items like cheese or jam, and the presence of their name card in the cutlery package only indicated their involvement in catering, not manufacturing.

Additionally, the Tribunal referred to a similar case involving another appellant where an unconditional stay had been granted on the duty payment. Citing this precedent, the Tribunal granted a waiver of duty for the admission of the appeal and ordered a stay on the collection of dues during the appeal's pendency. This decision aligned with the finding that the act of assembling food items in a tray and serving them with the caterer's label did not warrant the imposition of excise duty.

In conclusion, the Tribunal ruled in favor of the appellants, stating that there was no basis for demanding excise duty on the activity of combining food items in trays during flight catering. The decision highlighted the distinction between catering and manufacturing activities, ultimately leading to the grant of a waiver on duty payment pending the appeal process.