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2016 (4) TMI 938 - AT - Service TaxService tax liability - Outdoor Catering Services - running industrial catering in the premises of various industries but did not took registration under Finance Act, 1994 - appellant not filed any reply to the show-cause notice and also not appeared before both the lower authorities as well as before Tribunal - Held that - there is no dispute that the appellant is liable to pay Service Tax on the outdoor catering services rendered by him. It is found that the Service Tax liability has been worked out by the Department considering the entire amount received by the appellant as gross value of service rendered without giving them benefit of cum-tax. The Service Tax liability, if not charged on the bill, the amount received by the appellant/assessee needs to be considered as cum-tax as Service Tax liability needs to be work place. Accordingly, the Service Tax liability is upheld by relying on the ratio of decision of the Tribunal in the case of M/s Indian Coffee Workers Co-operative Society Ltd. Vs. Commissioner of Central Excise, Allahabad 2013 (10) TMI 343 - CESTAT NEW DELHI and judgement of Hon ble High Court of Madras in the case of Tamil Nadu Hotels Association Vs. Union of India 2001 (7) TMI 1 - HIGH COURT MADRAS . The appellant will discharge the Service Tax liability and the penalties imposed there of. The lower authority will work out the correct Service Tax liability on the based amount received cum tax basis. Since the Service Tax liability on outdoor catering services was being contested at various forums as also there was no clarity, accordingly, the penalty imposed on the appellant is set aside. - Appeal disposed of
Issues involved: Service Tax liability under the category of "Outdoor Catering Services" during the period 10.09.2004 to 31.03.2007.
In the judgment by the Appellate Tribunal CESTAT MUMBAI, the issue at hand pertains to the Service Tax liability concerning "Outdoor Catering Services" provided by the appellant between 10.09.2004 to 31.03.2007. The appellant, engaged in industrial catering, failed to register under the Finance Act, 1994. Despite the appellant's non-appearance and non-filing of a reply, it is established that Service Tax is due on the catering services rendered. The Department calculated the liability based on the entire amount received without considering the cum-tax benefit. The Tribunal upheld the Service Tax liability, referencing precedents like the case of M/s Indian Coffee Workers Co-operative Society Ltd. Vs. Commissioner of Central Excise, Allahabad, and the judgment of the Hon'ble High Court of Madras in Tamil Nadu Hotels Association Vs. Union of India. The appellant is directed to discharge the Service Tax liability and associated penalties. The correct Service Tax liability should be determined based on the amount received cum tax. Noting the ongoing disputes and lack of clarity on the Service Tax liability for outdoor catering services, the penalty imposed on the appellant is set aside. The judgment emphasizes that the appellant's liability to pay Service Tax on outdoor catering services is established, despite the appellant's non-participation in the proceedings. The Tribunal's decision is based on the principle that Service Tax liability should be calculated on the cum-tax basis, considering the amount received by the appellant. By citing relevant legal precedents, the Tribunal justifies its decision to uphold the Service Tax liability and penalties, ensuring that the correct amount is determined based on the cum-tax principle. The judgment reflects the importance of complying with tax regulations and the necessity for businesses to fulfill their tax obligations, even in the absence of active participation in legal proceedings. In conclusion, the Appellate Tribunal CESTAT MUMBAI's judgment clarifies the Service Tax liability issue concerning "Outdoor Catering Services" provided by the appellant. Despite the appellant's failure to engage in the legal process, the Tribunal upholds the Service Tax liability, directing the appellant to discharge the dues and penalties. By highlighting the significance of adhering to tax regulations and citing legal precedents, the judgment underscores the importance of fulfilling tax obligations and the repercussions of non-compliance. The decision aims to ensure fair taxation practices and uphold the integrity of the tax system, emphasizing the need for businesses to meet their tax responsibilities to avoid penalties and legal consequences.
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