Perfect Vending (India) Private Limited Vs Commissioner of Service Tax (CESTAT Chennai)
Summary: The CESTAT Chennai dismissed the assessee’s appeals and upheld service tax demands under the taxable category of
“outdoor catering service” for supplying coffee, tea and milk through vending machines installed at clients’ premises. Perfect Vending (India) Private Limited manufactured and sold coffee and tea vending machines and also supplied beverages at customer locations. The machines were sold, rented or lent free of cost; the appellant supplied premix coffee, tea, sugar, milk and other ingredients, maintained and cleaned the machines, stationed pantry personnel and collected monthly consideration on a per-cup basis. Although it had initially paid service tax under outdoor catering service, it stopped payment from October 2008.
Following audit, six notices covering October 2008 to June 2012 proposed aggregate demands based on the appellant’s beverage-supply arrangements.
The appellant argued that the transactions constituted sales of beverages and ingredients on which VAT had been paid, that it merely
provided vending machines and materials, and that charging per cup could not convert it into an outdoor caterer. The Tribunal examined “caterer” under Section 65(24), “outdoor caterer” under Section 65(76a) and taxable service under Section 65(105)(zzt) of the Finance Act, 1994.
