TMI Blog2009 (1) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... -1-2009 - T.K. JAYARAMAN, TECHNICAL MEMBER AND M.V. RAVINDRAN, JUDICIAL MEMBER S. Muthu Venkataraman for the Appellant. Mrs. Sudha Koka for the Respondent. ORDER T.K. Jayaraman, Technical Member. - This appeal has been filed against Order-in-Original No. 90/2007, dated 11-10-2007 passed by the Commissioner of Service Tax, Bangalore. 2. We heard both sides. 3. The appellants are engaged in the activity of providing in-flight catering services falling under the category of 'Outdoor Caterer Services', which is taxable, investigations were conducted and it was revealed that the appellant did not make payment of Service Tax on the gross amount collected from their clients towards the aforesaid services. It was seen tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ischarged the Service Tax liability on the handling and transportation charges. In the present appeal, they are mainly challenging the inclusion of the cost of food and beverages supplied to the airlines in computing the Service Tax liability. They had also relied on the decision of the Hon'ble Apex Court in the case of BSNL v. Union of India [2006] 3 STT 245 and the Tribunal's decision in the case of Idea Mobile communication Ltd. v. CCE [2006] 5 STT 352 (Bang.-CESTAT). 4.1 The Commissioner in his findings has stated that the appellants do indeed come under the category of 'Outdoor Caterer Service', which is taxable. According to him, in terms of the law, the appellants are liable to discharge Service Tax liability. However, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2 Further, the appellants have stated that they were under a bona fide belief that they would not be liable to Service Tax on the cost of the food/beverages supplied to the airlines, hence, the longer period cannot be invoked. However, they have been discharging Service Tax on handling and transportation charges. 5. The learned departmental representative reiterated the impugned order. 6. On a very careful consideration of the issue, we find that the appellants have entered into contract with their customers for supply of food/beverages to the airlines. The following activities are undertaken by the appellant: (i) The food cooked at the appellant's premises is packed in the trays in presence of the airline's representative; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Service Tax can be only on the service component and where the goods are involved and where sales tax is paid, then simultaneously Service Tax cannot be demanded. This position has been brought out in the decisions of the Tribunal. Anyhow, the Hon'ble Supreme Court in the case of Imagic Creative (P.) Ltd. v. CCT [2008] 12 STT 392 has dealt with an issue where the assessee had paid Service Tax for the services rendered. The charges were collected towards the services for evolution of prototype conceptual design i.e., creation of concepts. This activity was done by an advertisement agency. It provided for advertising services. It created original concept and design advertising material for their clients and design brochures and annu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit of Service Tax Notification No. 12/2003. He had not examined them but he has simply stated that they have not fulfilled the conditions. 6.1 In our view, the following position emerges: (i) In view of the various decisions of the Hon'ble Kerala High Court, the appellant would indeed be liable to Service Tax under the category of 'Outdoor Caterer Services'. (ii) In respect of the food/beverage supplied to the airlines, they would amount to sale of goods and the appellant had already paid the VAT on those values. In such circumstances, Service Tax cannot be levied on them. In fact, the decision of the Hon'ble Apex Court in the case of BSNL (supra) would clearly be applicable. (iii) The appellant is entitled for the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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