2015 (3) TMI 135 - AT - Service Tax

Convention Services - Outdoor Catering Service - Penalties under Sections 76, 77 and 78 - Held that - The demand is for the convention service. As per the provisions of Section 65 (32) of the Finance Act, the 'convention' means as a formal meeting or assembly which is not open to the general public, but does not including a meeting or assembly, the principal purpose of which is to provide any type of amusement, entertainment or recreation and as per the provisions of Section 65 (76a) of the Finance Act, 1994, outdoor caterer means a caterer engaged in providing services in connection with catering at a place other than his own. In the present case, there is evidence on record to show that the appellants are giving the Banquet hall to organize, marriage functions, get togethers, birthday parties etc. It is also evidence on record to show that the appellants are providing taxable services. Keeping in view, we find that there is no infirmity whereby the demand is confirmed in this regard. In respect of penalty imposed under Section 78 of the Finance Act, 1994 we find that the lower authority has imposed a penalty equivalent to twice amount of service tax which is in the given circumstances is harsh. Therefore, the penalty under Section 78 is reduced to equal amount of service tax confirmed - Decided partly in favour of assessee.

Summary

Issues:
1. Confirmation of demand for Convention Services
2. Confirmation of demand for Outdoor Catering Service
3. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994

Confirmation of demand for Convention Services:
The appeal was filed against the Order-in-Appeal confirming a demand of &8377; 1,19,915 for Convention Services. The appellant argued that they operated Banquet Halls where customers negotiated pricing for food supply, paid sales tax, and received food at the appellant's premises, attributing the total consideration to be the sale of food. The appellant contended that as no separate charge was received for the Banquet Hall, they were not engaged in providing taxable services. However, the Revenue presented evidence from invoices and recovered documents showing the appellant provided premises for various events and amenities, indicating the provision of taxable services. The Tribunal found evidence supporting the demand for Convention Services to be valid under the Finance Act.

Confirmation of demand for Outdoor Catering Service:
Additionally, a demand of &8377; 5,70,760 for Outdoor Catering Service was confirmed. The appellant argued that since food was delivered at their own premises and not at the customers' premises, they were not engaged in Outdoor Catering Service. However, the Revenue relied on invoices showing food supplied at customers' locations and documents indicating the appellant provided catering services at various external venues. The Tribunal found that the appellant indeed provided services in connection with catering at places other than their own, supporting the demand for Outdoor Catering Service.

Imposition of penalties under Sections 76, 77, and 78:
Penalties under Sections 76, 77, and 78 of the Finance Act, 1994 were imposed. The Tribunal noted that the penalty under Section 78, equivalent to twice the amount of service tax confirmed, was considered harsh in the circumstances. Consequently, the penalty under Section 78 was reduced to an amount equal to the service tax confirmed. The Tribunal upheld the impugned order confirming the penalties under Sections 76 and 77 but modified the penalty under Section 78 to align with the confirmed service tax amount.

In conclusion, the Tribunal confirmed the demands for both Convention Services and Outdoor Catering Service while adjusting the penalty under Section 78 to align with the confirmed service tax amount, finding the penalties under Sections 76 and 77 to be appropriate in the given circumstances.