Non-payment of service tax on banquet bills challenged; separate invoicing found to negate value clubbing, appeal allowed.

Non-payment of service tax on separately billed banquet food and beverages was contested; tribunal reasoning relied on evidence of distinct invoicing for mandap keeper service and sale of food, finding that the invoice separation satisfied notification compliance and therefore clubbing the value of food with the service for assessing service tax was unwarranted, with the service tax demand set aside. A separate limitation contention was found prima facie tenable and supported by coordinate decisions, resulting in the appeal being allowed in favour of the appellant.

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Issues: Whether the service tax demand confirmed by clubbing the value of food sold with mandap keeper charges (despite separate billing and VAT payment) is tenable, and whether the extended period of limitation could be invoked.

Analysis: The appellant's records show separate invoices and separate charges for mandap keeper services and for sale of food, with VAT discharged on the food component. Notification No. 12/2003-ST provides exemption to the extent of value of goods supplied with a service where evidence of the value of goods supplied exists. Coordinate bench decisions cited in the appeal hold that where catering charges are shown separately and VAT is paid, the requirements of Notification No. 12/2003-ST are satisfied and the food component cannot be clubbed with mandap keeper service for service tax. Those decisions further treat the question as one of interpretation of law, precluding invocation of the extended period of limitation arising from audit adjustments in similar circumstances.

Conclusion: The service tax demand confirmed by clubbing the value of food with mandap keeper charges is not tenable; the extended period of limitation is not invokable on these facts. The appeal is allowed in favour of the appellant.

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