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TMI Blog2019 (3) TMI 1436X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered as a commercial or industrial building or factory or plant or machinery. Therefore, the cleaning services rendered in the railway coaches are not covered by the taxing statute - railway coaches cannot be considered as commercial premises, being the rolling stock. If it had been the intention of the Legislature to cover even cleaning of railway coaches, busses, Air crafts, Ships etc., they would have been specifically covered. A taxing statute has to be strictly interpreted and if some one gets out of tax net because of the way the taxing statute has been drafted, this cannot be the remedied through a judicial/quasi judicial order - the appellant is not liable to pay service tax on the cleaning services. Outdoor catering services - Sale of food items and beverages in train and on platforms alongside the train - demand of service tax - Held that:- A similar case came up before Hon ble High Court of Allahabad in the case of Indian Coffee Workers Co-op Society Limited [2014 (4) TMI 407 - ALLAHABAD HIGH COURT] in which it has been held that services rendered by the assessee in the canteen or the principals is liable to be charged as service tax as outdoor catering service. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4), 65(76A) read with Section 65(105)(zzt). Accordingly, service tax is chargeable on the assessee under the aforesaid heads along with interest under section 75 of the Finance Act, 1994. Further, it is the case of the Revenue that since the appellant assessee has not taken the registration, not paid service tax or filed ST-3 returns, they are liable to penalty under sections 77(1), 77(2) and 78 of Finance Act, 1994. The first show cause notice OR No. 02/2012-Adjn (ST)(Commr.), dated 05.01.2012, demanding the service tax amounting to ₹ 2,80,34,772/- under the aforesaid three headings along with interest and penalties for the period 2007-08 to 2010-11 was issued by the Commissioner of Customs and confirmed vide Order-in-Original No. 5/2013(Service Tax)-Commr., dtd.17.01.2013. Appeal No. ST/26169/2013 was filed by the appellant against this Order-in-Original along with stay application and a conditional stay was granted to the appellant. Subsequently, periodical show cause notice OR No. 08/2013-Adjn. (ST)(ADC), dated 16.04.2013 was issued demanding service tax of ₹ 39,83,357/- along with interest and penalties covering the period April 2011 to March 2012. The third show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such commercial or industrial buildings and premises thereof; (iii) but it does not include such services in relation to agriculture, horticulture, animal husbandry or dairy. He would submit that in their case, they are rendering the service inside railway compartments. These cannot be called as commercial or industrial buildings or premises. They are, in fact, only rolling stock of the railways and therefore they do not fall under the tax net. He relies on the case law of R.K. Refreshments and Enterprises Pvt. Ltd. and others vs. CCE, Raipur [2018-TIOL-686-CESTAT-DEL)], in support of his contention, para 3 (i) of which reads as follows: Cleaning Services (Rs.3,09,194/-) The appellants were engaged in cleaning of railway coaches and toilets in the said coaches. The original authority confirmed tax liability under cleaning service. Section 65(195) (zzzd) read with Section 65 (24b) of the Finance Act, 1994 is relevant in the tax levy. The cleaning activity is defined as cleaning, including, specialized cleaning services, such as, disinfecting, ex-terminating or sterilizing of objects or premises of (i) Commercial or industrial building and premises thereof; or (ii) f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the petitioner that the transaction between the petitioner-company and Indian Railways amounted to catering services which attract levy of service tax and, therefore, cannot be subjected to levy of Value Added Tax. We are unable to accept the contention. As far as providing of food, snacks and water to the passengers on board the trains are concerned, the transaction, in our view, is altogether different from an outdoor catering service. Admittedly, the passengers travelling in the trains are served food and beverages as per a fixed menu approved by Railway Board. Neither the petitioner nor the passenger has any choice in respect of articles to be served in the trains or with respect to the quantity each passenger gets. It is not open to a passenger to ask for a food article of his choice, since neither such a food article is available in the train nor is the preparation or supply of food article as per the choice of the passenger, envisaged under the contract between the petitioner-company and Indian Railways. If the fixed menu provides, for say, supply of one samosa and one cake to a passenger, he cannot ask for more than one samosa or more than one cake even on payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re paying VAT and not service tax. The Government of Delhi demanded VAT on the sale of these items, IRCTC filed the above petition before the Hon ble High Court of Delhi who held that the activity amounts to sale of foods and therefore is liable to VAT. The ratio of this judgment of Hon ble High Court of Delhi would be that they are liable to pay VAT and not service tax, therefore no service tax can be levied on them under the head outdoor catering services also. 10. Lastly, he would argue that they had a genuine reason to believe that they were not liable to pay service tax on any of these cases, therefore all penalties may be set aside. 11. Countering the arguments of learned Counsel, learned Departmental Representative would submit that in the case of Sarovar Hotels Pvt. Ltd. vs. CCCE ST, Hyderabad-IV [2018(19)GSTL 650 (Tri.-Hyd.)], this Bench held that the term cleaning activity under section 65(24b) of the Finance Act, 1994 would include the cleaning services by the appellant in that case to the premises of Indian School of Business. The same ratio would also apply in their case also because commercial premises would include Railways, Air Port Authority of India etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tchen of IRCTC and sell them to the passengers at pre-determined prices and transfer some portion of the amount collected to IRCTC and retain the rest. Therefore, what they are rendering to IRCTC is a pure service therefore service tax is chargeable on the services rendered by the assessee. He would further argue that the department s appeals need to be allowed for the aforesaid reasons and the first appellate authority has in third and 4 th show cause notices through the impugned order, wrongly dropped the demands in respect of outdoor catering services. Lastly, he would argue that the assessee is a major contractor who has gone through the process of tender and has obtained the contract from IRCTC and therefore is fully aware of the legal provisions and has chosen not to pay service tax and therefore the extended period of limitation has been correctly invoked in their case. He would further submit that even after the investigation is over and the first show cause notice has been issued, the assessee continued to not paying service tax and it goes to show the wilful nature of violation of Act and Rules with the intention to evade payment of service tax. Therefore, the extended p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65(24b) read with Section 65(105)(zzzd) of the Finance Act, 1994 while it is the case of the assessee appellant that these services are not covered by the definition of cleaning services as they have not been rendering any such services in the commercial premises but are rendering the same on the trains. Section 65(24b) reads as follows: The cleaning activity is defined as cleaning, including, specialized cleaning services, such as, disinfecting, ex-terminating or sterilizing of objects or premises of (i) Commercial or industrial building and premises thereof; or (ii) factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises thereof, but does not include such services in relation to agriculture, horticulture, animal husbandry or dairying. It is clear that cleaning is with reference to objects or premises of commercial or industrial building, factory and premises thereof. The question is whether the trains in which they render these services can be considered as commercial or industrial buildings or premises or factory, plant or machinery, tank or reservoir of such commercial and industrial buildings and premises or otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terer. Outdoor caterer has been defined as a caterer engaged in providing services in connection with catering at a place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such services. The word Caterer has been defined as a person who supplies either directly or indirectly, any food, edible preparations, alcoholic or non alcoholic or similar items for any purpose or occasion. We find that the scope of the term caterer is very wide. Catering need not be only for an occasion but it can be for any purpose. Therefore, it is not necessary that the catering has to be an occasion of the wedding or other celebrations, it can be for any purpose. The question is whether if such service is provided under a contract to any other organisation, it can be considered as catering service. A similar case came up before Hon ble High Court of Allahabad in the case of Indian Coffee Workers Co-op Society Limited (supra) in which it has been held that services rendered by the assessee in the canteen or the principals is liable to be charged as service tax as outdoor catering service. In our view, the present case is similar to this inasmuch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to activities/services undertaken by them and sought details of turnover in respect of each service rendered by them on behalf of M/s IRCTC. On 22.05.2009, the appellant supplied the information. In para 4, it is recorded that on 03.03.2010, the statement of the owner of the assessee were recorded in which he gave all the details sought. In para 5, it is recorded that the letters dated 28.09.2011 and 01.11.2011 were addressed to the assessee asking for the balance sheets and profit loss accounts along with Ledger copies which were supplied by the assessee vide letter dated 15.10.2011. The proviso to Section 73(1) of the Finance Act, 1994 provides for invoking the extended period of limitation where the service tax has not been levied or paid or has been short paid or erroneously refunded by reason of fraud, collusion, wilful mis statement, suppression of facts or contravention of any provisions of this chapter or Rules made there under, with an intent to evade payment of service tax. A plain reading of the show cause notice would show that the assessee had not paid the service tax and had also not taken registration. The department initiated investigation. During the proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression of facts which have not been established in the show cause notice. Throughout the investigation, the appellant cooperated with the department and provided whatever information was sought. They have not taken registration because they were under the impression that they were not liable to pay service tax. Under these circumstances, we find that the assessee appellant has made out a case for waiver of penalty invoking the provisions under Section 80 of the Finance Act, 1994. In view of the above, the appeals are disposed of as below: (a) Service Tax on supply of bed rolls is confirmed within the normal period of limitation along with interest as applicable. (b) Service Tax on sale of food and beverages in trains and platforms under the head of outdoor catering service is confirmed within the normal period of limitation along with interest as applicable (c) Service tax on cleaning services is set aside. (d) All penalties are set aside invoking the provisions of Section 80 of the Finance Act, 1994. 16. The four appeals filed by the assessee and two appeals filed by the department are disposed of as indicated herein above. (Pronounced in open court on 26.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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