TMI Blog2023 (12) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ave come to watch the movie go to the counters during the interval period, stand in queue and buy the food items which are either already packed or are reheated and sold to people as and when their turn comes. After buying they bring those items to their respective seats and enjoy it while watching the movie. The duration of the interval is so short that it is not possible for the viewers to rush outside the cinema complex to buy food stuff and eat there. Just for making it convenient, the cinema complex provides some packaged or ready to eat food items and drinks. The choice of food stuff or soft drink is limited and the viewers have to accept from what is available. There is another aspect of the matter which is peculiar to the cinema complex, that these counters providing food items are not open to the public at large like any snack bar or restaurant but only those who have bought a ticket for viewing the movie can access them. Thus, the supply of food items and drinks to viewers through the counters in the cinema halls is equivalent to the transaction involved in sale of take away/packaged food. The Revenue has taken the plea that appellant has admitted their service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice tax on the activity of sale of food and beverages. Accordingly, show cause notice dated 13.10.2014 for the period 2013-2014 and also another show cause notice dated 15.10.2015 for the period 2014-2015 involving demand of Rs.10,26,97,058/- + Rs. 14,64,87,052/- = Rs.24,91,84,110/- on the ground that the service portion in the supply of food and beverages by the appellant from its air-conditioned establishment/outlets is a taxable service w.e.f. 01.04.2013 and also as per Rule 2C of the Service Tax (Determination of Value) Rules, 2006, the value of service portion involved in the supply of food and beverages is 40% of the total amount charged for the said supply. On adjudication, the demand under the said two show cause notices was confirmed, holding that the activity of the appellant is much more than the sale of the food and beverages as it involves an element of service by way of delivery of food and beverages and hence, is covered under Section 66 E (i) of the Finance Act, 1994. Being aggrieved by the said order, the appellant has filed the instant appeal. 4. Having heard both sides at length and having examined the records of the case, we need to consider the question a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght thereof. Therefore, the Revenue by way of Circulars clarified that service tax shall not be leviable where the transaction amounts to sale of goods. The first circular we need to take note of is the Circular dated 24.9.1997, which clarified that delivery of food where there is no dining and service extended, would not be subject to service tax and subsequently the Circular dated 10.09.2004 clarified that free home delivery of food by hotels and restaurants would not be subject to service tax. Further, Circular No. 96/7/2007 dated 23.8.2007 provided as : Service is not leviable on a transaction treated as sale of goods and subjected to levy of sales tax/VAT. Service Tax is not leviable on a transaction treated as sale of goods and whether a given transaction between the service station and the customer is a sale or not, is to be determined taking into account the real nature and material facts of the transaction. Payment of VAT/Sales Tax on a transaction indicates that the said transaction is treated as sale of goods. 7. On the introduction of restaurant services in 2011, the Circular dated 28.02.2011 clarified that pick up or delivery of foods or goods sold at MRP wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kers at a subsidised rate would come within the meaning of the expression service , irrespective of whether the food is supplied within the premises or outside the premises, observed once the activity undertaken by the petitioner in the form of supply of food to its workers at the subsidised rate is concerned to be part of the industrial obligation, it is unthinkable, the same can be construed as a service falling within the definition of the expression service under section 65B (44) of the Finance Act. Once again, in the case of M/s Hotel Priya Vs. Commissioner of G.S. Central Excise, Chennai, 2018 (9) TMI 1663, the Tribunal following the decision in M/s Ambedkar Institute of Hotel Management (supra) upheld the contention of the appellant that service element in outdoor catering service is catering to the need of the customer which includes serving the food whereas in the present case where the appellant is engaged in supply of food to M/s Mitsubishi Heavy Industries, there is only sale of the food which is delivered to their premises and therefore the activity does not fall within the definition of outdoor catering service. We now refer to the decision of the Madras High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay counters are positioned away from the main dining area that may or may not be air-conditioned. In any event, the consumption of the food and drink is not in the premises of the restaurant. In the aforesaid circumstances, I am of the categoric view that the provision of food and drink to be taken-away in parcels by restaurants tantamount to the sale of food and drink and does not attract service tax under the Act. 9. The above paragraphs have been reiterated later by the Ahmedabad Bench of the Tribunal in Hotel Utsav V CCE ST, Surat, 2022 (3) TMI 329. Lastly, we would take note of the latest decision of the Principal Bench of the Tribunal in the case of Haldirams Marketing Pvt Ltd Vs. Commissioner, Central Goods and Service Tax, GST Delhi Commissionerate, New Delhi 2023 (2) TMI 783 (CESTAT-New Delhi) and the limited issue in dispute was of cooked food sold by way of Takeaway on which service tax was levied. Referring to all the above decisions and the Circulars particularly clarification dated 13.8.2015 issued by the deputy commissioner, central excise and service, tax division, Chandigarh. It was accordingly held by the Tribunal that in case of take away of food, the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, the Court commented:- The essence of it is not an agreement for the transfer of the general property of the food or drink placed at the command of the customer for the satisfaction of his desires, or actually appropriated by him in the process of appeasing his appetite or thirst. The customer does not become the owner of the food set before him, or of that portion which is carved for his use, or of that which finds a place upon his plate, or in side dishes set about it. No designated portion becomes his. He is privileged to eat, and that is all. The uneaten food is not his. He cannot do what he pleases with it. That which is set before him or placed at his command is provided to enable him to satisfy his immediate wants, and for no other purpose. He may satisfy those wants; but there he must stop. He may not turn over unconsumed portions to others at his pleasure, or carry away such portions. The true essence of the transaction is service in the satisfaction of a human need or desire, ministry to a bodily want. A necessary incident of this service or ministry is the consumption of the food required. This consumption involves destruction, and nothing remains of what is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices invariably components of what you pay for. You may go to an air-conditioned cloth-shop or sweetmeat store or handcrafts emporium where cups of tea may be given, dainty damsels may serve or sensuous magazines kept for reading. They are devices to attract customers who buy the commodity and the price paid is taxable as sale. The substance of the transaction, the dominant object, the life-style and other telling factors must determine whether the apparent vendor did sell the goods or only supply a package of services. Was there a right to take away any eatable served, whether it be bad manners to do so or not? In the case we have, the decision went on the ground that such right was absent. In cases where such a negative is not made out by the dealer-and in India, by and large, the practice does not prohibit carrying homeexigibility is not repelled. 12. The provisions of section 65B (44) and 66E of the Finance Act, defining service and declared services having been clarified by the Circulars and interpreted in the various decisions, we are of the view that the material issue is no longer res-integra. As noted above in the decisions, in case of take away food, packaged it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Finance Act, for the charge of service tax. In this regard, we would like to take note of the decision of the Delhi High Court in Indian Railways C. T. Corpn. Ltd. Vs. Govt. of NCT of Delhi -2010 (20) STR 437 (Delhi), where the petitioner, a Government company was providing services, including catering on board the trains run by Indian Railways and the Court observed:- 46. Since there is transfer of goods, by the petitioner company to Indian Railways, for consideration and the property in the goods also passes to Indian Railways, the transactions between them is no doubt a case purely of sale of goods under the provisions of Sale of Goods Acts as well as Delhi Value Added Tax Act and the element of service by way of heating the food, heating/ freezing the beverages and then serving them to the passengers is purely incidental and minimal required for sale of food and beverages in a transaction of this nature. There is no privity of contract between two petitioner company and the passengers travelling in trains. 14. The learned Counsel for the appellant has referred to a decision of Court of Justice (Third Chamber) dated 10.3.2011 in Finanzamt Burgdorf V Manfred B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are binding on them, will squarely cover the present case. We, therefore are of the firm view that the service tax is not leviable on the sale of food items in packed form or by process of reheating in the cinema halls as there is no element of service involved therein. 16. The learned Authorised Representative has referred to an advance ruling in the case of In Re HRPL Restaurants Pvt. Ltd. (2023) 4 Centax 410, where it was held that when ice creams ordered are supplied along with cooked or prepared food through restaurant outlets, then supply would assume character of composite supply, classifiable under restaurant service with GST leviable at 5%. We are not swayed by the relied on order for the simple reason that the same has no precedential value in case of another party. 17. Since we have arrived at the conclusion that no service tax can be charged on the sale of food stuff in the PVR complex to the viewers of the movie, the provisions of Service Tax (Determination of Value) Rules, 2006 will not be applicable. We also do not delve on the fact of payment of VAT by the appellant. 18. Infact the other contentions also raised by the appellant needs no further cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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