2018 (7) TMI 1759 - AT - Service Tax

Classification of Services - the appellant was providing food services in the premises of Noida Golf Course at Noida - whether the services would fall under the head restaurant service or under the head outdoor catering service ? - Held that - The outdoor catering service is to be provided at the premises of the service recipient at his own premises or the premises taken on hire by the service recipient whereas in the case of restaurant service to be provided by the service provider in its own premises. Admittedly, in this case the place of service had been provided by the respondent as taken on rent from Noida Golf Course. In that circumstances, place where the service has been provided is premises of the respondent. The service of restaurant and outdoor caterer are distinguishable - Admittedly the services provided by the respondent in a restaurant of Noida Golf Course are in the nature of restaurant service as respondent is maintaining menu card, prices fixed in every item and there is no personal interaction with the service recipient in the restaurant - the services provided by the respondent do qualify as restaurant service . Appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of services as 'restaurant service' or 'outdoor catering service' for the purpose of Service Tax liability.

Analysis:
The case involved a dispute regarding the classification of services provided by the respondent as either 'restaurant service' or 'outdoor catering service' for the purpose of Service Tax liability. The Revenue contended that the respondent's activity fell under 'outdoor catering service', while the respondent argued that it should be classified as 'restaurant service'.

The Revenue issued a show cause notice demanding Service Tax under the category of 'outdoor catering services' for the period from 01.04.2007 to 31.03.2012. The matter was adjudicated, and the demand was confirmed with penalties. However, the ld. Commissioner(Appeals) set aside the adjudication order, leading to the Revenue's appeal.

The definition of 'outdoor caterer' and 'restaurant service' as per the Finance Act, 1994 was crucial in determining the correct classification. The Tribunal examined the definitions and noted that 'outdoor catering service' is to be provided at the premises of the service recipient, while 'restaurant service' is provided in the service provider's own premises.

The Tribunal referred to a decision by the Hon'ble Apex Court in Tamil Nadu Kalyana Mandapam Assn.'s case, which highlighted the distinctions between services provided by outdoor caterers and restaurants. The Court emphasized that outdoor catering involves personalized service with the customer having choices in food, quantity, manner of service, time, and place, unlike in a restaurant where the menu is limited.

Based on the Court's observation and the nature of services provided by the respondent, the Tribunal concluded that the respondent's services qualified as 'restaurant service' as they maintained a menu card, fixed prices for items, and lacked personal interaction with customers. Consequently, the Tribunal upheld the impugned order, dismissing the Revenue's appeal.

In conclusion, the judgment clarified the distinction between 'restaurant service' and 'outdoor catering service' based on the specific characteristics of each type of service, leading to the dismissal of the Revenue's appeal.