AI Drafter 
TaxTMI 
TaxTMI 
2019 (3) TMI 1436
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....994 and cleaning of toilets and compartments is chargeable to Service Tax as 'Cleaning Services' under section 65(24b) read with Section 65(105)(zzzd) of the Finance Act, 1994 and supply of food and beverages in trains and on platforms alongside the train is chargeable to service tax under the head of 'Outdoor Caterer's Services' under section 65(24), 65(76A) read with Section 65(105)(zzt). Accordingly, service tax is chargeable on the assessee under the aforesaid heads along with interest under section 75 of the Finance Act, 1994. Further, it is the case of the Revenue that since the appellant assessee has not taken the registration, not paid service tax or filed ST-3 returns, they are liable to penalty under sections 77(1), 77(2) and 78 of Finance Act, 1994. The first show cause notice OR No. 02/2012-Adjn (ST)(Commr.), dated 05.01.2012, demanding the service tax amounting to Rs. 2,80,34,772/- under the aforesaid three headings along with interest and penalties for the period 2007-08 to 2010-11 was issued by the Commissioner of Customs and confirmed vide Order-in-Original No. 5/2013(Service Tax)-Commr., dtd.17.01.2013. Appeal No. ST/26169/2013 was filed by the appellant against th....
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....concerned, he is contesting the demand on the ground that Section 65(24b) defines the cleaning activity as cleaning and specialised cleaning services such as "disinfecting, exterminating or sterilising of specified premises (i) commercial or industrial buildings and premises thereof; (ii) factory/plant or machinery, tank or reservoir of such commercial or industrial buildings and premises thereof; (iii) but it does not include such services in relation to agriculture, horticulture, animal husbandry or dairy. He would submit that in their case, they are rendering the service inside railway compartments. These cannot be called as commercial or industrial buildings or premises. They are, in fact, only rolling stock of the railways and therefore they do not fall under the tax net. He relies on the case law of R.K. Refreshments and Enterprises Pvt. Ltd. and others vs. CCE, Raipur [2018-TIOL-686-CESTAT-DEL)], in support of his contention, para 3 (i) of which reads as follows: "Cleaning Services (Rs.3,09,194/-) The appellants were engaged in cleaning of railway coaches and toilets in the said coaches. The original authority confirmed tax liability under cleaning service. Section 65(....
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....RCTC as reported in [2010(20)S.T.R. 437 (Del.)]. In this case, IRCTC was paying service tax on outdoor catering services and the Government of Delhi wanted to charge VAT on the sale of food items which IRCTC was contesting. The Hon'ble High Court of Delhi at Para 39 has held as under: 39. It was contended by the learned counsel for the petitioner that the transaction between the petitioner-company and Indian Railways amounted to catering services which attract levy of service tax and, therefore, cannot be subjected to levy of Value Added Tax. We are unable to accept the contention. As far as providing of food, snacks and water to the passengers on board the trains are concerned, the transaction, in our view, is altogether different from an outdoor catering service. Admittedly, the passengers travelling in the trains are served food and beverages as per a fixed menu approved by Railway Board. Neither the petitioner nor the passenger has any choice in respect of articles to be served in the trains or with respect to the quantity each passenger gets. It is not open to a passenger to ask for a food article of his choice, since neither such a food article is available in the train no....
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...., therefore, cannot be said to be higher than that involved in selling cooked food in a shop or in a restaurant. 9. He would submit that although the IRCTC's case is different from their case, the nature of their activity was the same i.e. sale of food items. IRCTC was paying service tax and not paying VAT while they were paying VAT and not service tax. The Government of Delhi demanded VAT on the sale of these items, IRCTC filed the above petition before the Hon'ble High Court of Delhi who held that the activity amounts to sale of foods and therefore is liable to VAT. The ratio of this judgment of Hon'ble High Court of Delhi would be that they are liable to pay VAT and not service tax, therefore no service tax can be levied on them under the head 'outdoor catering services' also. 10. Lastly, he would argue that they had a genuine reason to believe that they were not liable to pay service tax on any of these cases, therefore all penalties may be set aside. 11. Countering the arguments of learned Counsel, learned Departmental Representative would submit that in the case of Sarovar Hotels Pvt. Ltd. vs. CCCE&ST, Hyderabad-IV [2018(19)GSTL 650 (Tri.-Hyd.)], this Bench held that....
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....s' Co-op. Society Limited (supra) where there is a menu already decided as per contract entered into by the assessee with the main party and some amounts were being paid for their services. He would argue that as per the submission of Ld. Counsel for the appellant himself, they collect the food items from the pantry car/kitchen of IRCTC and sell them to the passengers at pre-determined prices and transfer some portion of the amount collected to IRCTC and retain the rest. Therefore, what they are rendering to IRCTC is a pure service therefore service tax is chargeable on the services rendered by the assessee. He would further argue that the department's appeals need to be allowed for the aforesaid reasons and the first appellate authority has in third and 4^th show cause notices through the impugned order, wrongly dropped the demands in respect of outdoor catering services. Lastly, he would argue that the assessee is a major contractor who has gone through the process of tender and has obtained the contract from IRCTC and therefore is fully aware of the legal provisions and has chosen not to pay service tax and therefore the extended period of limitation has been correctly invoked i....
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....ore he is not contesting the same on merits. Therefore the appellant is liable to pay service tax on the supply of bed rolls under business auxiliary services. (b) Cleaning of toilets and compartments: It is the case of the Revenue that these services are chargeable to service tax under the head 'cleaning services' under section 65(24b) read with Section 65(105)(zzzd) of the Finance Act, 1994 while it is the case of the assessee appellant that these services are not covered by the definition of 'cleaning services' as they have not been rendering any such services in the commercial premises but are rendering the same on the trains. Section 65(24b) reads as follows: The "cleaning activity" is defined as cleaning, including, specialized cleaning services, such as, disinfecting, ex-terminating or sterilizing of objects or premises of (i) Commercial or industrial building and premises thereof; or (ii) factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises thereof, but does not include such services in relation to agriculture, horticulture, animal husbandry or dairying. It is clear that cleaning is with reference ....
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....o IRCTC. Therefore, their case is one of rendering the service. This service is rendered by them as per the contract entered into with the principals viz: IRCTC. The question is whether this amounts to providing outdoor catering services. According to Section 65(105)(zzt), taxable service includes the service provided or to be provided to any person by an outdoor caterer. Outdoor caterer has been defined as "a caterer engaged in providing services in connection with catering at a place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such services." The word 'Caterer' has been defined as a person who supplies either directly or indirectly, any food, edible preparations, alcoholic or non alcoholic or similar items for any purpose or occasion. We find that the scope of the term 'caterer' is very wide. Catering need not be only for an occasion but it can be for any purpose. Therefore, it is not necessary that the catering has to be an occasion of the wedding or other celebrations, it can be for any purpose. The question is whether if such service is provided under a contract to any other organisation, it can be considered as cate....
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....le to penalty in terms of Section 78 of the Finance Act, 1994." The sequence of events which lead to this conclusion of suppression and wilful mis-statement can be found in the preceding paras. In para 2, it has been recorded that an investigation was initiated against the appellant and a letter dated 30.04.2009 was addressed to them seeking the information with regard to activities/services undertaken by them and sought details of turnover in respect of each service rendered by them on behalf of M/s IRCTC. On 22.05.2009, the appellant supplied the information. In para 4, it is recorded that on 03.03.2010, the statement of the owner of the assessee were recorded in which he gave all the details sought. In para 5, it is recorded that the letters dated 28.09.2011 and 01.11.2011 were addressed to the assessee asking for the balance sheets and profit & loss accounts along with Ledger copies which were supplied by the assessee vide letter dated 15.10.2011. The proviso to Section 73(1) of the Finance Act, 1994 provides for invoking the extended period of limitation where the service tax has not been levied or paid or has been short paid or erroneously refunded by reason of fraud, collusi....