2024 (10) TMI 382 - AT - Service Tax

Non-payment of service tax - scope of entry Sr. No. 19 A in the N/N. 14/2013-S.T, dated 22.10.2013 - Respondent has contended that it is providing services in relation to serving food or beverages only in the canteens maintained in the factories governed under the Factories Act, 1948 - HELD THAT - In terms of the said notification, services provided for serving of food or beverages in a canteen maintained by the factory was exempted from payment of Service Tax. There is no ambiguity in reading the said notification. The show cause notice, in this case, has not disputed the fact that the factories, where the Respondent was proving the canteen facilities, were registered under the Factories Act, 1948 and that the canteens were having the air conditioning facility. Thus, the learned Adjudicating authority has rightly dropped the show cause proceedings initiated against the respondent. Tthe issue arising out the present dispute is no more open for any debate, there are no merits in the appeal filed by the Revenue - appeal of Revenue dismissed.

Summary

Issues:
Interpretation of Notification No. 14/2013-S.T. dated 22.10.2013 regarding exemption from Service Tax for canteen services provided in factories under the Factories Act, 1948.

Analysis:
The case involved a dispute where the Respondent, engaged in providing canteen services to industrial establishments, claimed exemption from service tax under entry Sr. No. 19 A in Notification No. 14/2013-S.T. The agreements with the establishments outlined the provision of canteen and catering services by the Respondent, who procured raw materials and prepared food in the factory premises. The Respondent argued that it provided services only in canteens within factories governed by the Factories Act, 1948, with air conditioning facilities. The department initiated show cause proceedings, which were dropped by the Principal Commissioner of Service Tax, Pune, in an adjudication order dated 16.09.2016. The Revenue appealed this decision before the Tribunal.

The Tribunal noted that Notification No. 14/2013-S.T. dated 22.10.2013 exempted services related to serving food or beverages in canteens maintained in factories covered by the Factories Act, 1948, with air conditioning. The show cause notice did not contest that the factories where the Respondent operated canteens were under the Factories Act, 1948, and had air conditioning. Citing precedents, including cases like M/s. ICS Foods Pvt. Ltd. and Sodexo Facilities Management Services India Pvt. Ltd., the Tribunal found that the issue was settled. Notably, the Tribunal mentioned that the Supreme Court had upheld a similar decision in the case of ICS Food Pvt. Ltd. in 2019.

Given the settled nature of the issue and the consistency of previous judgments, the Tribunal dismissed the Revenue's appeal, affirming the decision to drop the show cause proceedings against the Respondent. The cross objection filed by the Respondent was also disposed of accordingly. The judgment was dictated and pronounced in open court by the Tribunal.