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of <h1>Service tax exemption for canteen services upheld beyond factory owners; broad interpretation favored.</h1> The Tribunal allowed the appeal, setting aside the demand for service tax. It held that the service tax exemption for canteen services applied to any ... Non-payment pf service tax - Outdoor Caterer Service - appellant did not collect the service tax from the client and also did not deposit the same into the government exchequer - October 2013 to March 2016 - exemption vide Entry No. 19A in the Notification No. 25/2002 – ST dated 20.06.2012 - HELD THAT:- The taxable service in relation to provision of ‘Outdoor Caterer’ is defined under Section 65 (76a) read with Section 65 (105) (zzt) of the Finance Act, 1994 and was attracting payment of service tax on the provision of such service. However, in exercise of the powers conferred by sub-section (1) of the Section 93 ibid, the Central Government vide Entry No. 19 in the Notification No. 25/2002 – ST dated 20.06.2012 has exempted the “Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year”. The said notification was amended vide Notification No. 14/2013-ST dated 22.10.2013, in inserting ‘Entry no. 19A’ in the base notification - On reading of entry 19A in the notification dated 22.10.2013, it reveals that the canteen maintained in a factory has been provided with the exemption from payment of service tax. The said notification nowhere specified that canteen maintained by or run by the factory can only be considered for the benefit of such exemption. Thus, irrespective of the person, who maintains the canteen in a factory, the service tax exemption as per Entry 19A is available to such person and the benefit cannot be restricted to the owner of the factory alone. In the present case, since the appellant had provided the services of serving food and maintaining the canteen located in the factory, belonging to M/s. Ceat Ltd., the benefit of service tax exemption as per the above referred notification should be available to it. Appeal allowed - decided in favor of appellant. Issues:Interpretation of service tax exemption for canteen services provided by an outdoor caterer.Analysis:The appeal involved a dispute regarding the non-payment of service tax by an appellant who provided canteen services to a company under an agreement. The appellant argued that they were exempt from service tax under specific notifications dated 20.06.2012 and 22.10.2013. The appellant contended that the exemption applied to canteens maintained in factories, irrespective of the owner. The Revenue, however, claimed that the exemption was only for canteens maintained by the factory owner. The Original Authority confirmed a service tax demand against the appellant, which was upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.The Tribunal analyzed the relevant notifications and legal provisions. It noted that the exemption under Entry 19A of the notification dated 22.10.2013 applied to canteens maintained in factories, without specifying that the exemption was limited to canteens maintained by the factory owner. Therefore, the service tax exemption was available to any party maintaining a canteen in a factory. The Tribunal referred to a previous case where a similar issue was decided in favor of the appellant, emphasizing that the exemption should not be restricted based on the maintainer of the canteen. The Tribunal distinguished the Revenue's relied-upon cases, highlighting that those cases were not directly related to the exemption benefit but rather to the levy and payment of service tax.Ultimately, the Tribunal found no merit in the impugned order and allowed the appeal in favor of the appellant, setting aside the demand for service tax. The decision was based on the interpretation of the service tax exemption provided under the relevant notifications and the application of such exemption to canteens maintained in factories, regardless of the maintainer.
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