The Chennai Beverage Vs Commissioner of GST and Central Excise (CESTAT Chennai)
Summary: The appeal was filed by M/s. The Chennai Beverage against Order-in-Appeal No. 142/2016 (STA-II) dated 26.08.2016, whereby the Commissioner (Appeals) upheld the Order-in-Original confirming service tax demand of Rs.7,73,322/- together with interest and penalties. The appellant was registered under the category of “Outdoor Caterer Service” and supplied tea, coffee, Horlicks, Boost, bread sandwiches, bread toast, biscuits, tender coconuts, lime juice and other refreshments to corporate establishments including M/s. ABN AMRO Bank.
For April 2007 to August 2009, the appellant had availed the benefit of Notification No.20/2004-ST, as amended by Notification No.1/2006-ST, by discharging service tax on 50% of the gross value. The Department denied the benefit on the ground that the supplies consisted only of beverages and light refreshments and did not constitute a “substantial and satisfying meal”. A Show Cause Notice dated 15.10.2012 proposed recovery of differential service tax with interest and penalties by invoking the extended period.
The appellant contended that the contracts were composite catering arrangements involving supply of food and beverages, that VAT had been discharged on the value of goods, and that the expression “substantial and satisfying meal” could not be confined to lunch or dinner. Reliance was placed, among others, on Bharat Sanchar Nigam Ltd. v. Union of India and Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes. The Revenue relied upon the strict construction applicable to exemption notifications and upon Perfect Vending (India) Pvt. Ltd. v. Commissioner of Service Tax, Chennai.
