Tribunal Waives Pre-Deposit & Stays Recovery for Caterer

The Tribunal granted an unconditional waiver from pre-deposit of the adjudged dues and stayed the recovery during the appeal's pendency for M/s. Suruchi Caterers in a case concerning a Service Tax demand, interest, and penalty under Section 78 of the Finance Act, 1994. The appellant's contention that providing meals to school students under the Mid-day Meal Scheme does not constitute 'Outdoor Catering Services' was considered, with the Tribunal emphasizing the sale nature of the activity. The lower appellate authority's decision was partly upheld, with the penalty being set aside.

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Issues involved:
Service Tax demand confirmation, Interest imposition, Penalty under Section 78, Appeal against Order-in-Appeal, Classification of activity as 'Outdoor Catering Services', Prima facie case for grant of stay.

Analysis:
The judgment pertains to an appeal and stay application against the Order-in-Appeal confirming a Service Tax demand of Rs.67,205 against the appellant, M/s. Suruchi Caterers, Pune, for the period January 2011 to March 2011, along with interest and penalty under Section 78 of the Finance Act, 1994. The lower appellate authority upheld the Service Tax demand but set aside the penalty. The appellant contended that providing meals to school students under the Mid-day Meal Scheme does not constitute 'Outdoor Catering Services'. Citing a Delhi High Court decision, the appellant argued that the service element in supplying food is negligible, primarily constituting a sale of food. The appellant requested a stay on recovery pending appeal.

The learned Counsel for the appellant argued that the cost of materials per meal per student, along with expenses for fuel and labor, justified the contention that the activity did not fall under 'Outdoor Catering Services'. The appellant relied on a previous court decision to support the argument that the service element in supplying food is minimal, emphasizing the sale aspect. On the other hand, the Revenue's representative reiterated the lower authority's findings without providing additional arguments.

The Tribunal considered the minimal amount received by the appellant for labor involved in supplying mid-day meals, highlighting the transaction's predominant nature as a sale. Acknowledging the appellant's prima facie case for the grant of stay, the Tribunal granted an unconditional waiver from pre-deposit of the adjudged dues and stayed the recovery during the appeal's pendency. The judgment was dictated and pronounced in court by the Tribunal.

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