2014 (8) TMI 547 - AT - Service Tax

Waiver of pre deposit - Outdoor catering service - Mid day meal to government schools - non profit making charitable trust - Held that - Vide Notification No. 47/2010-S.T., dated 3-9-2010, the activities of providing mid-day meal by NGO have been held to be exempted from the taxable service on outdoor catering. Similarly vide ad-hoc exemption Notification No. 2/2/2011 issued from F.No. 137/94/2010-CX.4 by Ministry of Finance, it has been held that mid-day meal provided by non government organization registered under any Central Act or State Act, under Centrally assisted Mid-Day Meal Scheme, from the whole of service tax leviable thereon under Section 66 of the Finance Act, during the period 10-9-2004 to 2-9-2010 - Stay granted.

Summary

Issues:
1. Pre-deposit of service tax and penalty under Sections 76, 77, and 78 of the Finance Act, 1994.
2. Classification of the appellant's activity as outdoor caterer's service.
3. Exemption of mid-day meal services from service tax.

Analysis:
1. The appellant sought to dispense with the pre-deposit of service tax and penalty amount confirmed against them for a specific period, along with penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The appellant, a trust, was engaged in a joint venture with the Government of Rajasthan to provide mid-day meals to school children. The Revenue alleged that the activity amounted to providing outdoor caterer's service, leading to the demand for service tax. The Tribunal considered the terms of the Memorandum of Understanding (MOU) between the appellant and the government, highlighting the absence of consideration received by the appellant. The appellant's role as a non-profit trust providing meals under a joint venture program was emphasized.

2. The Tribunal analyzed the definition of outdoor caterer's service as provided in Section 65 (76a) of the Finance Act, 1994. By examining the MOU and the nature of the appellant's activities, it was determined that the mid-day meal program was part of a joint venture with the government and did not align with the definition of outdoor caterer's service. The appellant's obligations, reporting requirements, and the principal-to-principal relationship with the government were crucial in establishing the nature of the services provided.

3. The Tribunal referred to relevant notifications, such as Notification No. 47/2010-S.T. and Notification No. 2/2/2011, which exempted activities related to providing mid-day meals from service tax under specific conditions. These notifications supported the appellant's claim for exemption from service tax on mid-day meal services provided as part of the joint venture program. Consequently, the Tribunal allowed the stay petition unconditionally, considering the exemptions and the nature of the appellant's operations as outlined in the MOU and relevant notifications.

This detailed analysis of the judgment highlights the considerations made by the Tribunal regarding the pre-deposit of service tax, the classification of services, and the applicability of exemptions to the appellant's mid-day meal program.