9911796707
TMI Blog2022 (4) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... ide dated 11.02.2011 as under: (a) Prior to 01.04.2007, they had entered into agreements with various corporate companies for supply of food only and they did not provide the activity of serving food. They discharged Sales Tax and Value-added Tax (VAT) on the food supplied by them and did not pay Service Tax prior to 01.04.2007 as they were not doing any service in connection with the activity of supply of food. (b) After 01.04.2007, two separate agreements were entered into by the appellant with their customers: one for the sale of food and the other for serving of food. They discharged Sales Tax on the amount received for the sale of food and paid Service Tax on the amount received as service charges for serving the food. They have filed returns evidencing the payment of Service Tax on the amounts received as service charges. (c) They have also stated that they have submitted documents on 28.05.2010 as called upon by the Department. (d) The demand from 10.09.2004 is not sustainable in law as all their activities were known to the Department. (e) However, they informed that without prejudice to their stand that sale of food is not chargeable to Service Tax, to avoid disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e activity of serving of food. Copies of VAT returns for the periods 2005-06, 2006-07 and 2007-08 and copies of Profit and Loss Account / Balance-Sheet for these periods would indicate that the appellant had been discharging Service Tax on the value of the service charges received by them from their customers after April 2007. The Department has wrongly alleged that the appellant has not discharged Service Tax correctly as the appellants did not avail the abatement under Notification No. 01/2006-S.T. 4.2 It is submitted by the Learned Counsel for the appellant that in fact, as there were two separate contracts, the appellant did not avail the abatement under the said Notification. However, Service Tax has been discharged fully on the income received from the activity of serving food. He argued that the value of the food supplied cannot be subjected to Service Tax and even if the two agreements are treated as a single composite one, the entire transaction will not attract Service Tax as it involves the value of food also. 4.3.1 He submitted that the levy of Service tax and the levy of VAT are mutually exclusive, as has been held by the Hon'ble Supreme Court in the case of M/s. Ima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aram, a sole proprietorship concern, for rendering the activity of serving food, the appellant cannot be saddled with the liability to pay Service Tax. It is also stated by him that the wordings in a single contract cannot be taken as the sole basis for holding that all the transactions of the appellant with various companies for the period prior to April 2007 included the activity of serving food also. 4.5 The Learned Counsel for the appellant argued on the ground of limitation also. He submitted that the appellant had taken registration in 2007 when they entered into contracts for undertaking the activity of serving food. That all details were disclosed in their returns; they have also submitted all documents when called upon to do so by the Department. The appellant has not wilfully suppressed or misstated any fact with the intent to evade payment of Service Tax. That the demand raised by invoking the extended period of limitation cannot sustain. Further, that the issue as to whether the appellant ought to have entered into a single contract and discharged Service Tax after availing the abatement in terms of Notification No. 01/2006-S.T. or as to whether the payment of Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 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;]" (iii) Again as per Section 65(24) of the Act, "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 or occasion;" 9.1 The issue prior to 01.04.2007 can be addressed first. According to the appellant, prior to 01.04.2007, they were not providing any activity of serving food to their customers. It is argued by the Learned Counsel for the appellant that the appellants were only supplying food and the activity of serving food was undertaken by some other contractor. In the Show Cause Notice, the agreement dated 05.06.2006 entered into by the appellant with M/s. Manali Petro Chemicals is extracted. Clauses (g) and (h) of the said agreement read as under: "g] The caterer shall engage adequate number of daily workers and supervisors to render prompt and courtesy service during all the shifts. The total number of persons to be engaged daily should not be less than 54 (including 3 supervisors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period after 01.04.2007. Admittedly, the appellant has been filing returns and paying Service Tax after 2007. The appellant has entered into two separate contracts and has been discharging Service Tax on the income received under the agreement for rendering the services. They have been paying Sales Tax / VAT on the amounts received for the supply of food. The case of the Department is that the value of these two contracts has to be clubbed together and after giving the abatement of 50% in terms of Notification No. 01/2006-S.T. dated 01.03.2006 the appellant has to discharge its Service Tax liability. 13.1 The levy of Service Tax under Outdoor Catering Services would be attracted only if the activity involved serving of food and not mere sale of food. In Commr. of Service Tax, Pune-I v. M/s. Bindras Hospitality Service Pvt. Ltd. reported in 2020 (42) G.S.T.L. 217 (Tri. - Mumbai) it was held that sale of cooked food to the employees at the counters would not be taxable under Outdoor Catering Services. The relevant part of the order reads as under: "3. On examination of the case records, we find that the respondent had installed point of sales machines/Bradma machines at the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any goods for cash, deferred payment or other valuable consideration. (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. (c) a tax on the delivery of goods on hire-purchase or any system of payment of instalments. (d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration. (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply of service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made." It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
