2019 (3) TMI 1854 - AT - Service Tax

Levy of service tax or VAT - Outdoor catering service or not - Sale of edible foods to employees of the corporate house, who had provided the space and that selling of food articles had suffered VAT levied under the Maharashtra VAT Act - HELD THAT - The respondent had installed point of sales machines/Bradma machines at the counters from where the cooked food is sold to the employees of the corporate house and that for selling the food items, the respondent had paid appropriate VAT amount levied under the local State Act. It also transpires that the respondent had not separately claimed any charges either from the corporate or from their employees towards provision of any service. Thus, analyzing the factual matrix of the case and also the statutory provisions, the Learned Adjudicating Authority has recorded specific finding that service tax is not payable on the foods sold by the respondent to its consumers directly - there are no justifiable reason or ground to accept the submissions that service tax liability should be fastened on the respondent for providing the taxable service of outdoor catering service. Appeal dismissed - decided against Revenue.

Summary

Issues: Appeal against service tax demand for outdoor catering service

Analysis:
1. Issue of Taxable Service Definition: The main issue in this case revolves around whether the activities conducted by the respondent fall under the definition of taxable service of outdoor catering service as per the provisions of the Finance Act, 1994. The Revenue contended that the respondent's activities align with the definition of outdoor catering service, while the adjudicating authority held that no separate charges were made towards providing any service by the respondent, and VAT was already levied on the food items sold.

2. Examination of Case Records: The Tribunal examined the case records and noted that the respondent had installed point of sales machines for selling cooked food to the employees of a corporate house. It was observed that the respondent had paid VAT under the local State Act for the food items sold and had not claimed any separate charges for providing any service. The adjudicating authority had specifically found that no service tax was payable on the foods sold directly to consumers by the respondent.

3. Decision and Rationale: After considering the factual matrix of the case and statutory provisions, the Tribunal upheld the adjudicating authority's decision. The Tribunal found no justifiable reason in the Revenue's submissions to impose service tax liability on the respondent for outdoor catering service. Consequently, the Tribunal dismissed the appeal filed by Revenue, affirming that there was no infirmity in the impugned order dropping the service tax demand under the taxable category of outdoor catering service.

In conclusion, the Tribunal's judgment emphasized that the respondent's activities did not attract service tax liability for outdoor catering service as they did not charge separately for any service provided, and VAT had already been levied on the food items sold. The decision was based on a thorough analysis of the case records, statutory provisions, and the lack of merit in the Revenue's arguments.