9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 822 - AT - Service TaxShort payment of service tax - outdoor catering services - under-valuation of taxable services - in-flight catering services to International and Domestic airlines - bundled services - HELD THAT - For an activity to be called as outdoor catering, there has to be the preparation of food, supply of food and serving of the food. Apparently and admittedly, the activity of the respondent herein is that they are providing/supplying food to various airlines alongwith the responsibility of packing and handling of food, loading in transportation thereof alongwith the requisite equipments and of providing the laundry services. This admitted fact is sufficient shown that there is no activity of serving the food, the Hon‟ble Supreme Court in the case of TAMIL NADU KALYANA MANDAPAM ASSN. VERSUS UNION OF INDIA 2004 (4) TMI 1 - SUPREME COURT has held that a tax on services rendered by outdoor caterers is in pith and substance a tax on services and not a tax on sale of goods or on hire purchase activities. Even Bombay High Court in the case of NARANG HOTELS AND RESORTS PVT. LTD. VERSUS STATE OF MAHARASHTRA AND OTHERS 2003 (10) TMI 620 - BOMBAY HIGH COURT has held that the sale by a flight kitchen of eatable or goods is complete when the goods are loaded in the supply unit and despatched when the supplied food is served simultaneously it is outdoor catering else it is merely sale of goods more so in the case when invoice shows it as a separate element. Thus it is clear that the issue involved in the present case is no more res-integra that supply of F B per se is not the outdoor catering service . It rather amounts to sale of F B. The Adjudicating Authority has considered most of the above said decisions while dropping the demand proposed by the impugned show cause notice. There are no infirmity in the order, the same is hereby upheld - appeal dismissed.
Issues involved:
The issues involved in this case are the alleged evasion of service tax by undervaluing taxable services related to in-flight catering services, interpretation of provisions u/s 66E (i) of Finance Act, 1994, determination of whether supply of food and beverages constitutes outdoor catering services, and the applicability of service tax on the value of services provided. Alleged Evasion of Service Tax: The Department filed an appeal challenging the order-in-original dated 31.01.2018, alleging that the respondents had underpaid service tax by undervaluing taxable services related to in-flight catering services. The Department proposed recovery of service tax amounting to Rs. 11,58,48,051/- for the period from July 2012 to March 2016, along with interest and penalties. The respondents were accused of deliberately raising separate invoices for food and beverages and other services to evade payment of service tax on the food portion. Interpretation of Provisions u/s 66E (i): The Department argued that the respondents intentionally avoided paying service tax on the supply of food to international and domestic flights, which falls under Section 65 (B) (44) of the Finance Act, 1994. They contended that service tax is leviable on the value of all services under Section 66B from 01.07.2012, except those specified in the negative list in Section 66(D), which does not cover the impugned activities of the respondents. Nature of Outdoor Catering Services: The respondents claimed that their activity of supplying food to airlines, along with related services, does not constitute outdoor catering services as defined in the Finance Act. They argued that the transportation and handling of food were incidental to the supply of food and not to the activity of outdoor catering. They highlighted that the service tax is not payable on the supply of service, relying on various legal precedents. Applicability of Service Tax: The Tribunal analyzed the definitions of outdoor catering services under the Finance Act, emphasizing the preparation, supply, and serving of food as essential elements. It was observed that the respondents were primarily supplying food to airlines without directly serving it to passengers, which aligns with the concept of sale of goods rather than outdoor catering services. Legal precedents were cited to support the conclusion that the supply of food and beverages does not constitute outdoor catering services, leading to the dismissal of the Department's appeal.
|
