2015 (12) TMI 1315 - AT - Service Tax

Denial of Abatement claim - whether the appellant is liable for abatement of 50% of the gross amount charged by him under the Outdoor Catering Services, though he has been awarded the entire contract of maintenance of guest house which includes the cleaning and housekeeping services - Held that - Adjudicating authority as well as the first appellate authority has come to a conclusion that the value of the contract awarded to the appellant, needs to be bifurcated and tax liability needs to be upheld under the category of cleaning and housekeeping services after denying them benefit of abatement of 50% of the gross value - both the lower authorities have mis-directed themselves in the entire case. On a perusal of the records, we find that M/s L&T has issued works order for annual maintenance contract of guest house which included the scope of maintaining the guest house providing the catering as per the terms and conditions. The appellant undisputedly discharged the Service Tax liability on the bills raised by them under the category of outdoor catering services after claiming abatement of 50% of the gross amount as provided. We find that the issue is no more res integra as this Bench in the case of Centre for Development of Advance Computing Vs. Commissioner of Central Excise, Pune - 2015 (8) TMI 642 - CESTAT MUMBAI has held that the Service Tax law, no where states that if two distinct activities are undertaken or provided in a single agreement, they should not be taxed under the same service category. In view of the clear law as has been settled by the Bench, we find that the impugned order is unsustainable and liable to be set aside - Decided in favour of assessee.

Summary

Issues:
1. Whether the appellant is liable for abatement of 50% of the gross amount charged under Outdoor Catering Services when also providing Housekeeping and Cleaning Services under an Annual Maintenance Contract for a Guest House.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur. The appellant, registered under Service Tax for Outdoor Catering Services, was also providing Housekeeping and Cleaning Services under an Annual Maintenance Contract for a Guest House. The Revenue contended that the appellant should not receive the benefit of abatement for the gross amount charged under Outdoor Catering Services due to undertaking the entire maintenance contract, including cleaning and housekeeping services.

The adjudicating authority and the first appellate authority had ruled in favor of denying the abatement benefit and upholding tax liability for the cleaning and housekeeping services. However, the Tribunal found that both authorities had misdirected themselves. It was noted that the appellant had fulfilled the Service Tax liability for bills raised under Outdoor Catering Services with the abatement of 50% of the gross amount. The Tribunal referred to a previous case where it was established that if two distinct activities are provided under a single agreement, they can still be taxed under the same service category. Therefore, the Tribunal concluded that the impugned order was unsustainable and set it aside.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.