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TMI Blog2013 (7) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... merely because the service has been provided at the premises provided by the service recipient – the court rejected the argument of the appellant that the transaction is one of sales and the plea of financial hardship is without any merits. The appellant directed to make a pre-deposit of 50% of the service tax demand - stay granted partly. - ST/346/2012 - S/408/13/CSTB/C-I - Dated:- 26-3-2013 - P R Chandrasekharan And Anil Choudhary, JJ. For the Appellant : Mr Prakash Shah, Adv. For the Respondent : Mr P N Das Commissioner (AR) Per: P R Chandrasekharan: The appeal and stay application are directed against Order-in-Original No. 31/ST/SB/2011-12 dated 28/02/2012 passed by the Commissioner (TAR), Mumbai. 2. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod vide show cause notice dated 19/10/2010 for the period 2009-10 demanding a service tax of Rs. 76,92,214/- and vide notice dated 05/10/2011 for an amount of Rs. 1,79,01,649/- for the period 2010-11. 2.1 All the three show cause notices were adjudicated by a common order and a total demand of Rs. 5,67,93,885/- was confirmed for the period 16/06/2005 to 31/03/2011 under the category of outdoor catering services' along with interest thereon under Section 73 read with Section 75 of the Finance Act, 1994. Penalties were also imposed under Section 76, 77 and 78 of the Finance Act, 1994. Hence the appellant is before us. 3. The learned counsel for the appellant submits that they have not rendered any outdoor catering service. What they hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed sales aspect it is not an indivisible contract. 3.2 The appellant also pleads financial difficulty and submits that their share capital is only to the extent of Rs. 1 lakh and as per their balance sheet they have incurred a loss of Rs. 9,62,39,536/- for the period ending 31/03/2012. 3.3 In view of the above stay be granted. 4. The learned Commissioner (AR) appearing for the Revenue, on the other hand, contends that the services are rendered not to the employees of M/s. L T but to M/s. L T. Whatever expenses are incurred by the appellant in providing the services to L T is compensated by L T in two ways: (1) on the basis of bills raised for the meals supplied; and (2) by way of subsidy granted by L T to the appellant for the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T to their employees at the rates specified by M/s. L T. Payment for the said service is also made by M/s. L T on monthly basis based on the bills raised by the appellant on M/s. L T. In addition to that, M/s. L T compensates the appellant by way of subsidy for any loss incurred by the appellant in rendering the said service. From the nature of the transaction, as cited above, it is clear that the service is provided by the appellant to M/s. L T Limited and not to the employees of M/s. L T Ltd. Service recipient is the person who pays for the services received and it is M/s. L T who is making the payment in the present case and, therefore, it is clearly established that the service is rendered to M/s. L T Limited and to nobody else. Merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of the goods sold while rendering the service and, therefore, the argument of the appellant that the transaction is one of sales is prima facie is not sustainable. 5.4 The reliance placed by the appellant on the decision of the Hon'ble Karnataka High Court in the case of LSG Sky Chef India Pvt Ltd. in fact does not help their case at all. In the said decision, the hon'ble High Court held that outdoor catering', is a composite contract and service tax is payable on service aspect and sales tax is payable on deemed sales aspect and it is not an indivisible contract. In other words, the hon'ble High Court clearly held that even in an outdoor catering', service tax is payable on the service aspect. Thus, when service tax liability is arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the consideration received for rendering the service the appellant is liable to discharge service tax liability. 5.7 Coming to the financial status of the financial status of the appellant that they are incurring losses, the amount declared as loss in the balance sheet is the amount reflecting excess expenditure over income,. This cost is reimbursed/recovered to the appellant by M/s. L T Ltd. year after year by way of subsidy and it is not the appellant who is bearing the cost but M/s. L T. In view of the above, the plea of financial hardship is without any merits. 6. Accordingly, we direct the appellant to make a pre-deposit of 50% of the service tax demand confirmed against the appellant within a period of eight weeks and report co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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