2020 (1) TMI 675 - AT - Service Tax

Classification of services - mandap keeper service - appellant also providing catering services to the persons/companies availing the facility of the Mandap Keeper Service - splitting the value of service into two parts; one part with invoices raised for banquet hall charges and another for catering/food charges - sale of food-whether service or not - benefit of N/N. 12/2003-ST dated 20 June 2003. HELD THAT - The matter is no longer res-integra as the issue has already been decided in appellant s own case CCE, JAIPUR VERSUS CHOKHI-DHANI RESORTS PVT. LTD. 2017 (1) TMI 38 - CESTAT NEW DELHI where it was held that the supply of food and beverages is not an activity ancillary to the primary activity of convention service, value of food items need not be added. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of service tax liability on charges for Mandap Keeper Service and catering services; Compliance with Notification No. 12/2003-ST.

Analysis:
The appellant, registered under Mandap Keeper Service, faced a show cause notice for allegedly splitting service charges to avoid service tax. The Deputy Commissioner confirmed a service tax demand of ?3,93,140 along with penalties and interest. The Commissioner (Appeals) upheld this decision, leading the appellant to appeal before CESTAT New Delhi.

The appellant argued that the sale of food, charged separately and subject to VAT, should not be considered a service. They claimed that not all Mandap Keeper Service customers availed catering, treating both activities as distinct. The Departmental Representative supported the order-in-appeal findings.

CESTAT noted a previous decision in the appellant's favor, where the separate charges for Mandap Keeper Service and catering were deemed compliant with Notification No. 12/2003-ST. CESTAT held that the appellant was entitled to the benefit of the notification, as demonstrated by the separate invoicing for the services. Therefore, they set aside the impugned order-in-appeal and allowed the appeal in favor of the appellant.

In conclusion, CESTAT New Delhi found the impugned order-in-appeal lacking merit, following the precedent set in the appellant's previous case. The Tribunal ruled in favor of the appellant, setting aside the order and allowing the appeal.