ST - Society running canteen in factory premises - appellant is separate entity & engages various persons for preparation of food, though, in premises of their client and for serving food - appellant cannot claim that they are not provider of catering service: CESTAT
By TIOL News Service
MUMBAI, JUNE 19, 2015: THE appellant, registered as Co-operative Society, is engaged in providing services of running a canteen in the factory premises of their client M/s. Alfa Laval (India) Ltd.
They are purchasing all the materials like food articles, grocery etc. required for making food and served the same to the employees of M/s. Alfa Laval (India) Ltd.
Revenue authorities were of the view that the services rendered by the appellant would fall under the category of "Outdoor Catering Service" for the period 10.09.2004 to 31.07.2009.
The demand was contested on merits as well as on limitation. The main ground of the appellant before the adjudicating authority was that they are a Co-operative Society of the employees and they are only preparing the food while all the items required for preparation of food, utensils, space, water and electricity are provided by their client M/s. Alfa Laval (India) Ltd.. The Adjudicating authority confirmed the demand raised with interest and penalties and appropriated the amounts paid before the issuance of show-cause notice.
Since the Commissioner(A) upheld the demand, the appellant is before the CESTAT. Incidentally, the Commr(A) had invoked the provisions of s.80 of the FA, 1994 and set aside the penalties.
It is submitted that the appellant is only preparing food and may not be covered under the definition of outdoor catering service. Reliance is placed on the decision in the case of Rajeev Kumar Gupta v. CCE - 2009-TIOL-864-CESTAT-DEL; that the appellant had already discharged the service tax liability and has also paid interest.
The AR submitted that in an identical case of Indian Coffee Workers Co-op Society Ltd. 2013-TIOL-1440-CESTAT-DEL the Bench had held that the services rendered by the appellant therein would be covered under the definition of "outdoor catering service".
The Bench adverted to the definition of the term 'caterer', 'outdoor caterer' contained in the FA, 1994 and observed -
++ It could be seen from the definition that a person who supplies directly or indirectly any food, edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or accoutrements for any purpose of occasion, is a "caterer".
++ Firstly, it is undisputed that the appellant is a separate entity in the eyes of law and engages various persons for preparation of food, though, in the premises of their client and also engages different personnel for serving the food. This would indicate that the appellant has not engaged himself in preparing food and serving the same to the employees of Alfa Laval (India) Ltd., though the employees of Alfa Laval (India) Ltd., are the members of the appellant co-operative society.
++ Secondly, on perusal of the agreement entered by the appellant with Alfa Laval (India) Ltd., we find that Alfa Laval (India) Ltd., had decided to engage specialized services in respect of catering services for their employees and appellant's credential was considered, having demonstrated their expertise in the said activity with their own trained personnel and having offered to undertake the activities relating to the catering service on contract basis, contract was awarded to appellant. On such clear-cut preamble to the contract entered by the appellant with Alfa Laval ((India)) Ltd., appellant cannot claim that they are not provider of the catering service.
After extracting the findings of the lower appellate authority, the Bench noted that the same were not disputed by the appellant.
Observing that there is strong force in the contention of the AR that the said issue has been decided by the Principal Bench in the case of Indian Coffee Workers Co-op Society Ltd. (supra) and that the decision cited by the appellant of Rajeev Kumar Gupta (supra) has been distinguished in the case of Indian Coffee, the Bench held that there was no reason to interfere with order of the lower appellate authority.
The Bench also observed that against the setting aside of penalties by the Commissioner(A), the Revenue had not come in appeal.
The appeal of the assessee was rejected.
In passing : Also see 2013-TIOL-711-CESTAT-MUM.
(See 2015-TIOL-1184-CESTAT-MUM)
