2018 (9) TMI 1663 - AT - Service Tax

Outdoor Catering service - supply of food made in the hotel to the client premises - Case of appellant is that the activity is only sale of foods involving delivery at the premises of M/s. Mitsubishi - Department is of the view that since some person from the hotel goes to the company the activity falls within the definition of outdoor catering. Held that - The element personalized service is involved in outdoor catering. In the present case, it is very much clear from the facts that the appellant is merely delivering the food to the company and there is no service element involved. - If one person goes to the premises of the company to check whether the food is sufficient, it can be overseeing the activity of sale of food. But this cannot be considered as catering to the service of the customer. Identical issue decided in the case of M/S AMBEDKAR INSTITUTE OF HOTEL MANAGEMENT VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, CHANDIGARH 2015 (9) TMI 163 - CESTAT NEW DELHI , where it was held that Since the appellant are preparing mid day meals in their Institute and not in the schools where the meals are served are not involved in serving of the meals in any manner, in our view they are not covered by the definition of outdoor caterer and hence their activity of preparing and supplying meals for mid day scheme would not be covered by the definition of taxable service under Section 65(106(zzt). The activity does not fall within the definition of outdoor catering service - demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand of service tax under outdoor catering service.

Analysis:
The appellant was engaged in supplying food to a company and was raising bills for the sale of food and transportation separately. The department alleged that the activity fell under outdoor catering service and issued a show cause notice for demanding service tax, interest, and penalties. The original authority and Commissioner (Appeals) upheld the demand, leading to the current appeal.

The appellant argued that they were only selling food and not providing any service as defined under outdoor catering service. They highlighted that the transportation was collected on a cost basis, and they did not serve food to the company's workers. The appellant relied on relevant legal precedents and circulars to support their position. Additionally, they contended that they had paid the service tax upon investigation before the show cause notice was issued, thus no penalty should be imposed.

The department argued that the appellant was not only preparing food but also overseeing the activity at the company's premises, which constituted a service element falling under outdoor catering service. They emphasized that separate invoices were raised for food supply and transportation, indicating an attempt to evade service tax.

The Tribunal analyzed the definition of outdoor catering service and noted that personalized service was a key element in such services. They referred to legal precedents to distinguish between outdoor catering and mere sale of food. The Tribunal concluded that the appellant's activity of delivering food to the company did not involve a service element as required under outdoor catering service. Therefore, the demand for service tax was deemed unsustainable, and the appeal was allowed.

In summary, the Tribunal ruled in favor of the appellant, stating that the activity of selling and delivering food did not qualify as outdoor catering service, as there was no personalized service element involved. The demand for service tax was set aside, and the appeal was allowed with any consequential relief.