9911796707
TMI Blog2014 (4) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... titution and the appellant having, admittedly, paid VAT in respect of the supply of food including beverages in the canteen/restaurant to individual customers who paid the amount according to the menu card, no service tax can be levied since it comes within the definition of ''sale' under Article 366 (29A) (f) of the Constitution of India read with Section 2 (ac) (vi) of U.P. Value Added Tax Act; (2) Whether the appellant having charged the amount in cash directly from individual customers in respect of the food, eatables, drinks and beverages according to the rates mentioned in the menu card maintained in the canteen/restaurant run by it, hence it is neither providing any service to NTPC nor to LANCO but is only selling the goods in the restaurant to individual customers and is not liable for payment of any service tax as outdoor catering service under Section 65 (76a) read with Section 65 (24) of Finance Act, 1994; and (3) Whether the Tribunal has committed an error of law in confirming the imposition of penalty without considering the law laid down by the Apex Court in the case of Union of India Vs. Rajasthan Spinning & Weaving Mills2, and the decision of the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A notice to show cause was issued on 5 April 2011 by the office of the Commissioner of Central Excise, Allahabad requiring the assessee to show cause why service tax in the amount of Rs.10,40,803/- for the period 1 October 2009 to 30 September 2010 should not be imposed on the assessee by treating the activity of the assessee of running restaurants/canteens at the premises of NTPC and LANCO as "outdoor catering services" within the meaning of Section 65 (76a) of the Finance Act, 1994. The assessee submitted a reply to the notice to show cause. By an order dated 16 September 2011, the Joint Commissioner of Central Excise & Service Tax, Allahabad confirmed the demand of Rs. 10,40,803/- as service tax under Section 73 of the Finance Act, 1994 together with interest. A penalty of Rs. 10,000/- under Section 77 (1) (a) was imposed. Additionally, a penalty under Section 78 of the Finance Act, 1994 was imposed on the ground that the assessee had suppressed material facts from the department by not getting itself registered in due time, by not submitting ST-3 returns and by not paying the dues of service tax for the taxable services provided by the assessee. The Commissioner (Appeals) dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection with catering at a place other than his own including a place provided by way of tenancy or otherwise by the person receiving such services. Consequently, the assessee provides a taxable service under Section 65 (105) (zzt); (iii) the assessee provides service of an outdoor caterer as defined in Section 65 (76a) to NTPC and LANCO. Under the agreements with those two entities, the assessee has agreed to provide the facility of a canteen where food, edibles and beverages are made available. The fact that food, beverages or edibles are consumed by employees of those entities or, as the case may be, by those who use the guest house or facility, makes no difference to the position that the service is provided by the assessee to NTPC or, as the case may be, to LANCO. Once the assessee provides an outdoor catering service within the meaning of Section 65 (76a) under the agreement with NTPC or LANCO respectively, that would attract service tax; (iv) the taxable event in respect to the levy of Value Added Tax is not the same as the taxable event which attracts the liability to pay service tax. VAT is imposed on a sale of goods, as defined with reference to the provisions of Article 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... caterer. A caterer is an outdoor caterer because services in connection with catering are provided at a place other than his own. The use of the expression ''in connection with catering' broadens the ambit of the definition by bringing within its purview not merely a service of catering but a service which has a connection with catering. The place where the service is to be provided must be a place other than that of the caterer himself. The inclusive part of the definition includes a place which may be provided to the caterer by the person receiving the service either by an agreement of tenancy or otherwise. 9. In the present case, the assessee is a caterer. The assessee is a person who supplies food, edibles and beverages for a purpose. The purpose is to cater to persons who use the facility of a canteen which is provided by NTPC or, as the case may be, by LANCO within their own establishments. NTPC and LANCO have engaged the services of the assessee as a caterer. The assessee is an outdoor caterer because the services which he provides as a caterer are at a place other than his own. The place is provided by NTPC and LANCO. The inclusive part of clause (76a) expands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service provided. Unlike a tax which is imposed on the sale of goods, the charge of service tax is on the provision of a taxable service provided by the assessee. Hence, the fact that the assessee may be paying VAT on the sale of goods on the supply of food and beverages to those who consume them at the canteen, would not exclude the liability of the assessee for the payment of service tax in respect of a taxable service provided by the assessee as an outdoor caterer. 12. Learned counsel appearing for the assessee, relies upon the judgment of a Constitution Bench of the Supreme Court in K. Damodarasamy Naidu & Bros. Vs. State of Tamil Nadu & Anr.4. Under the Tamil Nadu General Sales Tax Act, as amended in 1984, the definition of ''sale' was expanded to include a supply of goods being food or drink by way of or as part of service or in any other manner. Initially, exemptions were granted on the sale of food and drink by hotels, restaurants, sweet stalls and other eating houses. In 1997, a provision was introduced, by which the exemption was provided to those whose total turnover was not more than Rs. 25 lacs. The submission of the restaurant owners was that it is only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arily a tax on service rendered by the outdoor caterer. 15. For the aforesaid reasons, the authorities below were justified in confirming the demand for service tax. 16. That leaves the Court to the question as to whether a penalty under Section 78 of the Finance Act, 1994 was justified. Sub-clause (1) of Section 78 provides as follows: "78. Penalty for suppressing, etc. of value of taxable services (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of -- (a) fraud; or (b) collusion; or (c) willful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or the rules made thereunder with intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liable to pay a penalty, in addition to such service tax and interest thereon, if any, payable by him, which shall not be less than, but which shall not exceed twice the amount of service tax so not levied or paid or short levied or short paid or erroneously refunded:" 17. Before the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
