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TMI Blog2024 (1) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... eparate contract emphasized in impugned order remains of no legal consequence, when supplier of service and service receiver indicate through invoice by implication that separation of both elements was agreed upon and accepted by both parties to the contract - extended period cannot be invoked against the appellant, even if some contrary decisions existed too, as matter involves interpretation of law. The impugned order set aside - appeal allowed. - MR. SOMESH ARORA, MEMBER (JUDICIAL) AND MR. C.L MAHAR, MEMBER (TECHNICAL) Shri. Saurabh Dixit, Advocate for the Appellant Shri. Rajesh R Kurup, Superintendent (AR) for the Respondent ORDER Brief facts of the case are that the assessee is engaged in the business of running a hotel under the name style of Surya Palace Hotels . They were engaged in providing of various Service viz. Accommodation to their guests, Room Services, Mandap keeper Services, outdoor catering services, Restaurant Services, Pandal and Shamiana Services, Management or business consultant services and Renting of immovable property services, etc. The hotel had rooms for guest accommodation, restaurants, health fitness centre, banquet hall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to the preparation of digital advertising material and in connection with the international culinary/recipe/foodservice software development and other relevant consultancy in respect of Hotel of the assessee, for consideration in foreign currency was liable to Service Tax under reverse Charge in terms of Section 66A of the Act, which appeared to have not been paid by the assessee. 6. It was alleged that the said fact of non-payment of Service Tax came to the knowledge of the Department only during the course of audit. It appeared that the Assessee wilfully suppressed the fact of providing such services from the department with intent to evade payment of Service tax and hence the extended period for the recovery of Service Tax appeared applicable in the present case.78. In view of all the above, it appeared to the department that the Assessee had contravened the provisions of Section 65, 66, 66A, 66B, 67, 68, 69, 70 of the Act (as amended) read with Service Tax Rules 1994 (i.c., the rules ), Place of Provision of Services Rules 2012, Point of Taxation Rules 2011, Service Tax (determination of Valuation) Rules 2006 read with notification no. 1/2006-ST dated 01.03.2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 returns for service category of Mandap Keeper / and for all other services filed by the Assessee from time to time during the period 2010-11 to 2012-13 revealed that, despite specific query as to whether any exemption notification has been availed, they had never claimed the benefit of the exemption notification 12/2003-ST dated 20.06.2003, nor disclosed the same in their ST-3 returns. However they have given reference, of notification no. 1/2006ST dated 01.03.2006 on the invoices issued for hall hiring charges. Therefore, it was alleged that the Assessee ought to have paid service tax in terms of abetment notification no. 01/2006-ST dated 01.03.2006 at the appropriate rate and from appropriate date. Whereas, under section 65 (24) of Finance Act, 1994, the definition of caterer is defined as under: (24) caterer means any person who supplies, either directly or indirectly, any food, edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or accoutrements for any purpose of occasion . Whereas, under section 65 (66) of Finance Act, 1994, the definition of mandap is defined as under: (66) Mandap means any immovable property as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to services provided by hotel. The notification No.25/2012-ST, dated 20.06.2012 grants exemption to services specified in the notification. None of services specified therein related to services provided by hotel. Therefore the services as discussed hereinabove having been provided by the Assessee for consideration and hence were to be treated as taxable services in terms of Section 65 B(44) ibid. 12. Whereas the entry No. 4 of Notification No. 26/2012-ST, dated 20.06.2012 provides the abatement for bundled service by way of supply of food or any other article of human consumption or any other drink, in a premises (including hotel, convention centre, club, Pandal, Shamiana or any other place, specially arranged for organizing a function) together with renting of such premises subject to the conditions specified in the corresponding entry in the column of condition of non-availment of Cenvat credit. 13. In view of above facts, it appeared that post 1-7-2012 also, the service tax in relation to Mandap Keeper services along with other services including supply of food contracts/catering services would have to be paid on the abated value as provided for or on the entire value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost represents the value of the food and beverages supplied while providing such taxable services of Mandap Keeper Services. 17. We find from the calculation as appearing in Annexure-B forming part of the SCN, that out of the total Gross value of Rs. 17,65,25,932/- pertaining to the period 2010-11 to 30.6.2012, an amount of ,19,34 /- represents the gross value of Hall hiring charges collected and subjected to assessment of Service Tax under the category of Mandap Keeper Service, whereas, major amount of Rs. 16,45,91,205/- represents the gross value of Banquet/catering charges collected towards serving of food beverages, but claimed as exempted from payment of Service Tax under Notn. No.12/2013-ST. Thus, if the above amounts are converted in to percentages, it is seen that as against 93.24% of the value representing supply of food beverages which has been claimed exempt by virtue of Notn. No. 12/2003-ST, only a paltry amount representing 6.76% of the Gross value charged from the clients have been subjected to levy of Service Tax under the category of Mandap Keeper Services. 17.1 Similarly, we find from the calculation as appearing in Annexure-D forming part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be produced by the appellant. If in order to claim the exemption under Notification No. 12/03-S.T., the appellant claims 6.1.2.3 In view of the above discussion, we hold that there was no sale involved in the Appellant's transaction as Mandap keeper while serving their customers, for there is no sale of food and beverage as defined in Section 2(h) of the Central Excise Act, 1944 When there is no sale of any materials or goods, the exemption under Notification No. 12/03-S.T. would not apply. This exemption notification is inapplicable to indivisible service contracts like the present one in hand 6.1.3.1 As regard the third contention of the Appellant that value of food and beverages served in their case is more than 40% of the gross amount charged for service in relation to use of Mandap and abatement under Notification No. 21/97-5.T. and its successor Notification N 0. 1/06-ST. is 40% abatement of actual value of food and drinks has to be allowed under Notification No. 17/03-S.T., and disallowance of exemption under this notification would amount to levy of both Service tax by Central Government and Sales tax/VAT by the State Government on the same value, which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices within the definition of sale and purchase of goods. This is particularly apparent from the following phrase contained in the said sub-article such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods . In other words, the operative words of the said sub-article is supply of goods and it is only supply of food and drinks and other articles for human consumption that is deemed to be a sale or purchase of goods. 44. The concept of catering admittedly includes the concept of rendering service. The fact that tax on the sale of the goods involved in the said service can be levied does not mean that a service tax cannot be levied on the service aspect of catering. Mr. Mohan Parasaran, leamed senior counsel for the appellant submitted that the High Court before applying the aspect theory laid down by this Court in the case of Federation of Hotel and Restaurant v. Union of India Ors. (supra) ought to have appreciated that in that matter Article 366(29A)(f) of the Constitution was not considered which is of vital importance to the present matter and that the High Court ought to have differentiated the two matters. In reply, our attention was invi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x by the State Governments which they cannot do. But the position is different when charging Service tax on an indivisible service contract by Central Government where some goods have been used for performing the service. For charging tax on such indivisible service contract, no legal fiction is required-service tax is to be charged if the service is taxable on the measure as chosen by the legislature, as it is settled law that measure of a tax is independent of the nature of the tax. The Service tax can be charged on the gross amount charged for the service including the value of the goods used for providing the service. Therefore the observations of Hon'ble Supreme Court in case of Imagic Creative Pvt. Ltd. (supra) that payments of Service tax and VAT are mutually exclusive is in consonance with observation of the Apex Court in para 44 of its judgment in case of Tamil Nadu Kalyana Mandapam Association v. Union of India (supra). 6.2 It was pleaded by the Appellant that Notification No. 21/97-S.T. and its successor Notification 1/06-S.T. which are specific notifications meant for Mandap keepers have a condition that benefit of this exemption notification would not be availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent from outdoor catering service and Hon'ble Supreme Court's judgment in case of Tamil Nadu Kalyana Mandapam Association v. Union of India (supra) is not applicable to providing of food, snacks and water to passengers on board the trains and the same is pure sale of goods. Thus the judgment of Hon'ble Delhi High Court in case of IRCTC v. Govt. of NCT of Delhi Others (supra) cited by the Appellants is not applicable to the facts of the present case in hand. 6.4 In view of the above, we hold that there was no sale contract in the Appellant's contract as Mandap keeper for the purpose of levy of Service tax under Finance Act, 1994 and therefore exemption Notification No. 12/03-ST. is not available to the Appellant. They should have paid service tax after determining their liability on the basis of Notification No. 21 197-S.T. and its successor Notification No. 1/06-ST. if conditions of such notification are satisfied. Therefore, so far as appeal No. ST/374/08 and ST/399/09 is concerned, the service tax demands are correct on merits and so far as appeal No. ST7462/2010 is concerned, since in this case, even the Notification No. 1/06-ST. has been denied on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) the decision of the Tribunal in the case of Daspalla Hotels (P.) Ltd. (supra) though quoted was not considered. That the subsequent decision of the Tribunal and the decision of Hon'ble Karknataka High Court in the case of LSG Sky Chefs (India) (P.) Ltd. (supra) fully covers the disputed issue in favour of the Appellant. Also, unlike the said case of Sayaji Hotels (supra), wherein at Para 6.1.2.2 and 6.2.1 it was held that in absence of any evidence, regarding VAT payment being necessitated and made on food sale value, such portion cannot be excluded from taxable value for Service Tax levy, the issue on hand stands on a different footing in light of VAT department certificate at Page no.250 of appeal paper book, in this regard. 22. Unlike a situation where the service provider simply does not pay any Service Tax at all by rendering service, and pays only VAT on food sale, in which circumstances, value of service has to be determined and taxed, in the present case, the service charges and sale price being charged separately and while service charges were subjected to Service Tax levy and food sale charges were subjected to VAT admittedly, the various case laws referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 2. It has been the contention of the appellant that sale of food is being charged separately by them and on which they are discharging the VAT liability and the activity of the sale of food by no stretch of imagination can be called as a service. It has also been contended that it is not necessary for every customer who avail the Mandap Keeper Service to avail the catering service from the appellant. Both the activities are absolutely separate and, therefore, they are rightly claiming the benefit of Notification No. 12/2003 - ST dated 20 June 2003. 3. We have also heard learned Departmental Representative who has generally supported the findings given under impugned order-in-appeal. 4. Having heard both the sides, we find that matter is no longer resintegra as the issue has already been decided in appellant's own case vide final order No. 58729- 58730 of 2017 dated 15 December 2017. The relevant extract of the above decision is being reproduced here below :- 4. We find that the impugned order has observed vide paragraph 6.4 that the appellant had also sold food to such persons, who were availing the facilities of Mandap associated with the Dhani. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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