Case Law Details
Sai Food Services Vs Commissioner of C.G.ST (CESTAT Mumbai)
Service Tax – Irrespective of the person who maintains canteen in a factory, exemption as per Entry 19A of 25/2012-ST is available to such person – Benefit cannot be whittled down by restricting it to factory owner alone: CESTAT
The taxable service in relation to provision of ‘Outdoor Caterer’ is defined under Section 65 (76a) read with Section 65 (105) (zzt) of the Finance Act, 1994 and was attracting payment of service tax on the provision of such service. However, in exercise of the powers conferred by sub-section (1) of the Section 93 ibid, the Central Government vide Entry No. 19 in the Notification No. 25/2002 – ST dated 20.06.2012 has exempted the “Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year”. The said notification was amended vide Notification No. 14/2013-ST dated 22.10.2013, in inserting ‘Entry no. 19A’ in the base notification. The said newly inserted Entry 19A reads as “Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year.” On reading of entry 19A in the notification dated 22.10.2013, it reveals that the canteen maintained in a factory has been provided with the exemption from payment of service tax. The said notification nowhere specified that canteen maintained by or run by the factory can only be considered for the benefit of such exemption. Thus, irrespective of the person, who maintains the canteen in a factory, the service tax exemption as per Entry 19A is available to such person and the benefit cannot be restricted to the owner of the factory alone. In the present case, since the appellant had provided the services of serving food and maintaining the canteen located in the factory, belonging to M/s. Ceat Ltd., the benefit of service tax exemption as per the above referred notification should be available to it.
We find that on an identical situation, this Tribunal in the case of M/s ICS Food Pvt. Ltd. (supra) has set aside the demand and allowed the appeal in favour of the said party, holding that canteen maintained by the outdoor caterer should fall under the purview of Entry No. 19A and service tax exemption cannot be whittled down.
FULL TEXT OF THE CESTAT JUDGEMENT
This appeal is directed against the impugned order dated 30.05.2019 passed by the learned Commissioner of Central Excise & Service Tax (Appeals), Raigarh, Navi Mumbai.
2. Brief facts of the case are that the appellant is inter alia, engaged in providing the taxable service under the category of ‘Outdoor Caterer’ to various corporate entities. In the present case the appellant had entered into an agreement with M/s. Ceat Ltd., whereby the appellant was required to run a canteen in their factory premises. As per the terms of agreement, the appellant was responsible for providing the manpower for serving and preparing food for the employees within the factory premises and elsewhere as and when required. For the period 01.07.2012 to 22.10.2013, the appellant had charged and collected service tax on the said service and deposited the same with the Central Government account. However, during the disputed period from October 2013 to March 2016, the appellant did not collect the service tax from the client and also did not deposit the same into the government exchequer. Non-payment of service tax was owing to the reason that serving of food by a canteen maintained in a factory was exempted from payment of service tax in terms of Notification No. 25/2012-ST dated 20.06.2012 read with the Notification No. 14/2013-ST dated 22.10.2013. However, the department disputed the ground urged by the appellant for non-payment of service tax and accordingly, issued the show cause notice dated 09.02.2018, seeking for recovery of the service tax amount along with interest and for imposition of penalties on the appellant. The department has alleged that the exemption provided under Entry 19A in the notification dated 22.10.2013 is not available to the contractor/outdoor caterer providing services to M/s. Ceat Ltd. Further, it has also been alleged that any contractor/outdoor caterer providing service relating to serving of food inside and outside the factory premises is not eligible for the said exemption. The matter arising out of the SCN was adjudicated vide order dated 17.07.2018, wherein the Original Authority had confirmed the service tax demand of Rs.1,32,40,938/- along with interest and also imposed penalties under Section 77 and 78 of the Finance Act, 1994 against the appellant. On appeal against the said adjudication order, the learned Commissioner (Appeals) vide the impugned order dated 30.05.2019 has upheld the adjudication order and rejected the appeal filed by the appellant. Feeling aggrieved with the impugned order, the appellant has preferred this appeal before the Tribunal.
3. The learned Advocate appearing for the appellant submitted that the case of the appellant squarely falls under the purview of the above referred notifications dated 20.06.2012 and 22.10.2013 and as such, the appellant was not required to pay any service tax on the taxable service provided by it during the disputed period. To support such stand, the learned Advocate has relied upon the decision of this Tribunal in the case of M/s ICS Food Pvt. Ltd. Vs. Commissioner of Service Tax, Noida, reported in 2018-TIOL-2349-CESTAT-ALL. He further submitted that the Civil Appeal filed by Revenue against the said decision was dismissed by the Hon’ble Supreme Court, reported in 2019 (22) G.S.T.L. J163 (S.C.). Thus, the learned Advocate submitted that since the issue is no more res integra, the adjudged demand confirmed by the department cannot be sustained.
4. On the other hand, the learned AR appearing for Revenue reiterated the findings recorded in the impugned order. He further submitted that the exemption benefit provided under Entry No. 19A inserted in the notification dated 22.10.2013 is available only in relation to serving of food by a canteen maintained in a factory and not to the outdoor caterer, the appellant herein. The learned AR has relied upon the decision of this Tribunal in the case of Alfa Laval (I) Ltd. Employees Co-op. Consumers Society Vs. C.C.E, Pune-I reported in, 2015 (40) S.T.R. 255 (Tri. – Mumbai) and L. & T. Grahak Sahakari Sansthan Maryadit Vs. C.S.T., Mumbai-II reported in, 2017 (49) S.T.R. 561 (Tri.-Mumbai), to state that the service tax demand confirmed against the appellant is in conformity with the statutory provisions.
5. Heard both sides and perused the records.
6. The taxable service in relation to provision of ‘Outdoor Caterer’ is defined under Section 65 (76a) read with Section 65 (105) (zzt) of the Finance Act, 1994 and was attracting payment of service tax on the provision of such service. However, in exercise of the powers conferred by sub-section (1) of the Section 93 ibid, the Central Government vide Entry No. 19 in the Notification No. 25/2002 – ST dated 20.06.2012 has exempted the “Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year”. The said notification was amended vide Notification No. 14/2013-ST dated 22.10.2013, in inserting ‘Entry no. 19A’ in the base notification. The said newly inserted Entry 19A reads as “Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air-heating at any time during the year.” On reading of entry 19A in the notification dated 22.10.2013, it reveals that the canteen maintained in a factory has been provided with the exemption from payment of service tax. The said notification nowhere specified that canteen maintained by or run by the factory can only be considered for the benefit of such exemption. Thus, irrespective of the person, who maintains the canteen in a factory, the service tax exemption as per Entry 19A is available to such person and the benefit cannot be restricted to the owner of the factory alone. In the present case, since the appellant had provided the services of serving food and maintaining the canteen located in the factory, belonging to M/s. Ceat Ltd., the benefit of service tax exemption as per the above referred notification should be available to it.
6. We find that on an identical situation, this Tribunal in the case of M/s ICS Food Pvt. Ltd. (supra) has set aside the demand and allowed the appeal in favour of the said party, holding that canteen maintained by the outdoor caterer should fall under the purview of Entry No. 19A and service tax exemption cannot be whittled down. We also find that appeal filed by Revenue against the said order of the Tribunal was dismissed by the Hon’ble Apex Court vide judgment dated 03.01.2019, referred supra. The ratio of decisions (supra) relied upon by the learned AR for Revenue are distinguishable from the facts of the present case inasmuch as the issue involved in those decided cases relates to levy and payment of service tax on the impugned service and not on the issue of availment of the exemption benefit provided under the above referred notifications.
7. In view of the foregoing discussions, we do not find any merits in the impugned order. Accordingly, by setting aside the same, the appeal is allowed in favour of the appellant.
(Operative part of the order pronounced in the open court)
