By TIOL News Service

MUMBAI, SEPT 05, 2014: A mouth-watering demand (for Revenue, of course) of Rs. 2,47,23,573/- with interest & penalties was confirmed against the appellant on the ground that they had provided Outdoor catering service but not paid service tax.

Before the CESTAT, the appellant submitted that they are engaged in supply of foods to Khanna Hotels Pvt Ltd. (KHPL); they entered into an agreement for preparation of ready-to-serve food and beverages except liquor, soft drinks and aerated waters and to provide banquet service in the Club; as per the agreement, KHPL had provided necessary equipment including kitchen equipment, crockery, cutlery, linen etc. required for preparation of food and beverages;the food prepared by the appellants is served by the employees of KHPL; charges to be charged from the customers for various items are decided by KHPL; KHPL issued bills for catering and other services to the customers; the amount of bills was credited to KHPL's account and as per the agreement, the appellants were receiving 75% of the net sale collection as consideration towards sale of ready-to-serve food;that the appellants are paying VAT in respect of the sale of food to KHPL; that they are raising bills on KHPL for supply of food by 5th of every month, which was to be paid by KHPL within 15 days.

It is also submitted that KHPL is providing service which is covered under 'restaurant service' and they are paying appropriate service tax under the head 'Restaurant service' with effect from 1.5.2011. After adverting to the Board Circular DOF NO.334/3/2011-TRU dated 28.2.2011(annexure 'A', para 1.2) it is also emphasized that as the appellants are not catering the food prepared they are not providing any 'Outdoor Catering Service' & hence the demand is not sustainable.

The Revenue representative reiterated the findings of the lower authority.

The Bench after referring to the provisions of the FA, 1994 in the matter of 'Outdoor caterers' observed -

++ The reading of the above provisions shows that outdoor caterer means any person who is undertaking any activity in connection with catering at a place other than his own.

++ The crucial point to be decided in the present case is whether the appellants are serving the food at the place of KHPL or not. The contention of the appellants is that the food is not being served by them, rather the same has been served by KHPL.

++ The plea of the appellants that the food is not served by them is not taken into consideration by the adjudicating authority. The contention of the appellants that the food is not served by them requires verification.

Holding that the matter requires reconsideration by the adjudicating authority afresh, the order was set aside and the matter was remanded for de novo adjudication.

In passing: Perhaps, a case of 'many a slip between the cup and the lip"? Are the CCTVs on?

(See 2014-TIOL-1680-CESTAT-MUM)