2014 (12) TMI 82 - HC - Service Tax

Waiver of pre deposit - Outdoor catering service - Held that - Adjudicating authority whose order is in appeal before the Tribunal has not considered the appellant s evidence in support of its claim that they are entitled to the benefit of Notification No. 12/2003-S.T., dated 20 June, 2003. The adjudicating authority was prima facie incorrect in law in holding that where outdoor catering service is provided no question of exemption in respect of food sold is available. Notification No. 12/2003-S.T., dated 20 June, 2003 does not exclude outdoor catering services from its purview. The Tribunal also in the impugned order does not consider the above aspect, after recording the same. Moreover the decision of the Tribunal in the matter of Rajeev Kumar Gupta (2009 (3) TMI 122 - CESTAT, NEW DELHI) prima facie seems to apply. Therefore, in the facts and circumstances of the case we are of the view that interest of justice would be served if the appellant is directed to make a pre-deposit the amount of ₹ 25 lakhs as against ₹ 50 lakhs ordered by the tribunal - stay order modified.

Summary

Issues:
1. Justification of directing pre-deposit for hearing of the appeal.
2. Applicability of extended period of limitation.
3. Interpretation of Notification No. 12/2003-S.T.
4. Consideration of evidence by the adjudicating authority.
5. Application of the decision in Rajeev Kumar Gupta v. Commissioner of Central Excise.

Analysis:

1. The appellant challenged the Customs, Excise & Service Tax Appellate Tribunal's order directing a pre-deposit of &8377; 50 lakhs against a service tax demand. The appellant argued that the extended period of limitation was not applicable and that they were not liable to pay any service tax as they were only supplying food. The Tribunal held that no case was made out by the appellant for a total waiver of tax.

2. The appellant contended that they were entitled to the benefit of Notification No. 12/2003-S.T., dated 20 June, 2003, which exempts the value of goods and materials sold by the service provider to the recipient of service from service tax. The adjudicating authority did not consider the appellant's evidence supporting their claim, leading to a prima facie incorrect decision regarding the exemption in the case of outdoor catering services.

3. The High Court noted that the Notification did not exclude outdoor catering services from its purview and referred to a previous decision where a similar situation was held not to be covered under outdoor catering services. Therefore, the Court directed the appellant to make a pre-deposit of &8377; 25 lakhs within four weeks, with a waiver of the balance amount for hearing the appeal on merits and no coercive proceedings during the appeal.

4. Failure to deposit the specified amount within the stipulated time would result in the dismissal of the appeal. The Court disposed of the appeal with no order as to costs, emphasizing the importance of complying with the pre-deposit requirement to proceed with the appeal on its merits.