2015 (7) TMI 885 - AT - Service Tax

Tribunal upholds Service Tax demand for catering services but waives penalty under Section 78

MAOSAJI CATERERS Versus COMMISSIONER OF CENTRAL EXCISE, RAIPUR-I

MAOSAJI CATERERS Versus COMMISSIONER OF CENTRAL EXCISE, RAIPUR-I - 2015 (38) S.T.R. 69 (Tri. - Del.) Issues:Service Tax demand under outdoor catering service category, Penalties under Sections 76, 77, and 78 of the Finance Act, 1994.Analysis:The appellant appealed against an order confirming Service Tax demand for outdoor catering services and imposing penalties under the Finance Act, 1994. The appellant provided canteen services at a company's premises and was found liable for Service Tax under Section 65(24) of the Finance Act, 1994. The appellant argued they were not a caterer as defined by the Act and believed they were not liable for Service Tax. The respondent contended that the appellant's activities fell under outdoor catering services and penalties were justified. The Tribunal found that the appellant's services did constitute outdoor catering, as per the agreement terms with the company. Despite the appellant's belief and immediate payment of Service Tax upon investigation, the Tribunal held them liable for Service Tax. However, considering the bona fide belief, the penalty under Section 78 of the Finance Act was set aside.The Tribunal disagreed with the appellant's argument that they were not covered under the caterer definition. They emphasized the specific purpose of providing snacks and food in the agreement, leading to the conclusion that the appellant's services fell under outdoor catering. The Tribunal acknowledged the appellant's prompt payment of Service Tax and their belief of non-liability, leading to the setting aside of the penalty under Section 78 of the Finance Act. The appeal was disposed of in these terms.