2017 (9) TMI 230 - AT - Service Tax

Outdoor Catering Service - Respondent are engaged, in terms of agreement with NMDC, to provide food and other items to the employees in the premises provided by the clients - Held that - The terms of the agreement, as explained in the impugned order itself, shows that the work carried out by the respondent is squarely covered by the statutory scope of Outdoor Catering Service in terms of Section 65(76a) read with Section 65(24) of the Finance Act, 1994 - The Hon ble Allahabad High Court in case of Indian Coffee Workers Co-op. Society Ltd. 2014 (4) TMI 407 - ALLAHABAD HIGH COURT , examining the appeal filed by the respondent against confirmation of service tax demand held that the respondent are liable to pay service tax as an outdoor caterer, but set aside the penalty. The respondent are liable to pay service tax as Outdoor Caterer during the material period - there are reasonable causes for non-payment of service tax during the material time. Accordingly, it is fit case for invoking Section 80 for non-imposition of penalties under Section 76 and 78 - appeal allowed - decided partly in favor of assessee.

Summary

Issues:
1. Taxability of catering services under "Outdoor Catering Service" category.
2. Imposition of penalties under Section 76 and 78.
3. Non-appearance of respondent during proceedings.

Analysis:
1. The appeals were filed by Revenue against the orders of the Commissioner (Appeals-II), Raipur, regarding the taxability of catering services provided by the respondent under the category of "Outdoor Catering Service." The Revenue contended that the respondent's activities fell under the taxable category as they provided food items to employees in premises provided by clients. The Original Authority confirmed a service tax demand against the respondent, along with penalties under Section 78 and Section 77. The Commissioner (Appeals) set aside the tax liability, stating that the respondent was not liable as an "Outdoor Caterer." However, the Revenue appealed against this decision.

2. The Revenue argued that the respondent's catering services at the NMDC premises should be taxable and that the Commissioner (Appeals) erred in concluding otherwise. They cited a Delhi High Court case to support the imposition of penalties under both Section 76 and 78. Despite the non-appearance of the respondent during proceedings, the Tribunal proceeded to decide the case based on the records and submissions made by the Revenue.

3. Upon reviewing the impugned order, the Tribunal found that the respondent's activities did fall within the scope of "Outdoor Catering Service" as defined by the Finance Act, 1994. Referring to a similar case decided by the Allahabad High Court, the Tribunal held that the respondent was liable to pay service tax as an outdoor caterer. However, considering the circumstances, the Tribunal invoked Section 80 to waive the penalties under Section 76 and 78, thereby upholding the tax liability but not imposing any penalties on the respondent. The appeals of the Revenue were disposed of accordingly.

This detailed analysis covers the taxability of catering services, imposition of penalties, and the Tribunal's decision in the absence of the respondent during the proceedings.