Tribunal rules in favor of appellant, allowing appeal on Service Tax liability with abatement for Outdoor Catering Services

The Tribunal set aside the Order-in-Appeal and ruled in favor of the appellant, allowing the appeal regarding the liability for abatement of 50% of the gross amount charged under Outdoor Catering Services while also providing Housekeeping and Cleaning Services under an Annual Maintenance Contract for a Guest House. The Tribunal found that the appellant had fulfilled the Service Tax liability and could receive the benefit of abatement for the gross amount charged under Outdoor Catering Services, despite providing additional services under the same contract.

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Issues:
1. Whether the appellant is liable for abatement of 50% of the gross amount charged under Outdoor Catering Services when also providing Housekeeping and Cleaning Services under an Annual Maintenance Contract for a Guest House.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur. The appellant, registered under Service Tax for Outdoor Catering Services, was also providing Housekeeping and Cleaning Services under an Annual Maintenance Contract for a Guest House. The Revenue contended that the appellant should not receive the benefit of abatement for the gross amount charged under Outdoor Catering Services due to undertaking the entire maintenance contract, including cleaning and housekeeping services.

The adjudicating authority and the first appellate authority had ruled in favor of denying the abatement benefit and upholding tax liability for the cleaning and housekeeping services. However, the Tribunal found that both authorities had misdirected themselves. It was noted that the appellant had fulfilled the Service Tax liability for bills raised under Outdoor Catering Services with the abatement of 50% of the gross amount. The Tribunal referred to a previous case where it was established that if two distinct activities are provided under a single agreement, they can still be taxed under the same service category. Therefore, the Tribunal concluded that the impugned order was unsustainable and set it aside.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

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