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2022 (11) TMI 696 - AT - Service TaxClassification of services - canteen services with the factory - outdoor catering services attracting the service tax, as claimed by the department or said services is in nature and scope as described at Sr. No. 19A of the Mega Exemption No. 25/2012 –ST dated 17.03.2012 as amended vide Notification No. 14/2013-ST dated 22.10.2013 and therefore exempted from payment of service tax, as claimed by the Appellant? HELD THAT:- Undisputedly facts of the case are that the appellant has been outsourced by various factories for supply of foods and beverages to the employees of factory as per the agreement between them. In this regard appellant claim the benefit of entry 19A of mega exemption Notification as applicable for the service provided during the period January 2013 to March 2016 and did not discharge the liability of Service tax being considered as exempted from payment of service tax by virtue of said Notification. The taxable services in relation to provisions of ‘Outdoor Caterer’ is defined under Section 65 of the Finance Act 1994 and attracting payment of service tax on the provisions of such services. However it is found that there is Exemption vide Entry 19 in the Notification No. 25/2012- ST .dated 20.06.2012 that “ service provided in relation to serving food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year. The said Notification Entry was amended vide Notification No. 14/2013-ST dated 22.10.2013 by inserting ‘Entry No. 19A’ in the basic Notification - On plain reading of entry 19A in the Notification dated 22.10.2013 it clearly reveals that the canteen maintained in a factory has been provided with the exemption from payment of service tax. The said Notification nowhere provided that canteen maintained by or run by the factory can only be considered for the benefits of such exemption. In the present matter, it is also found that appellant provided the list of factories alognwith declaration from the factories that they are covered under the Factories Act. 1948 and copy of ledger in case they claimed the exemption. Out of total service tax demand of Rs. 58,35,451/- an amount of Rs. 57,35,420 is pertaining to the said entities only. Therefore to that extent only the service tax demand alongwith interest and penalty is dropped - As regard the rest of service tax demand of Rs. 1,00,031/- it is found that appellant agree for the said service tax liability and paid the same alongwith interest and penalty. Hence the impugned order –in-appeal to the extent of service tax demand of Rs. 1,00,031/- alongwith interest is upheld. However in the facts and circumstances of this case, appellant has made out a fit case for waiver of penalty, hence the penalty is set aside. The appeal is partly allowed.
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