TaxTMI 
TaxTMI 
2023 (2) TMI 783
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....ides the facility of 'take-away' of food items. 3. An audit of the appellant was conducted and it was noticed that the appellant had failed to pay due service tax on the activity of takeaway of food items as well as on the share of rent received from the associated enterprise. Accordingly, a show cause notice dated 28.09.2020 proposing service tax demand of Rs. 23,09,45,317/- with interest and penalties was issued to the appellant with the following allegations: (a) The appellant was providing services in respect of takeaway orders by way of preparing and packaging food items for the convenience of customers; (b) The customers availed services of the chef by placing customized orders and it was not the case where the appellant was merely purchasing and selling food; (c) The invoices raised by the appellant involved an inseparable service component charged from the customers; (d) The value of goods was same in respect of dine-in or take-away orders; (e) The Central Board of Indirect Taxes and Customs had also clarified, by way of a publication in leading newspapers, that take-away food would also suffer service tax at the same rate as ....
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....ance Act, 1994. ***** xxxxxxxxxx 18. In this context I find that when restaurant undertake sale, service is also rendered simultaneously. Therefore, the provision of take-away food and drinks involves the rendition of service and the mode of sale, that is, by way of take away, has no bearing in the matter. As far as case laws which have been relied upon by the noticee, ratio of said decisions are not applicable to the present case. xxxxxxxxxx 24. I find that the notice has relied on the Judgment of Madras High Court in the case of Anjappar Chettinad A/C Restaurant, M/s RSM Foods (P) Limited, M/s Thalapakati Hotels Private Limited, M/s Prasanam Foods (P) Limited vs. Joint Commissioner, the Commissioner of GST and Central Excise, 2021 (6) TMI 226. In this regard I find that ratio of judgment is not applicable in the present case as the issue involved in the present case is service portion involved in the take away. xxxxxxxxxx 35. From the SCN as well as the written submissions of the Noticee, I find it an admitted fact on record that the noticee have taken a premises on rent from DIAL and they have an agreement with DIAL for the s....
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.... Hotel Management vs. Commissioner of Central Excise and Service Tax, Chandigarh [2015 (40) S.T.R. 823 (Tri.-Del.)]; (e) M/s. Luxmi Enterprises vs. Commissioner (Appeals), Customs, Central Excise and Service Tax, Lucknow [Service Tax Appeal No. 60779 of 2013 decided on 10.01.2018 (CESTAT-Allahabad)] iii. Reliance has also been placed on a Circular dated 24.09.1997, which clarifies that delivery of food, where there is no dining service extended, would not be subject to service tax and to the Circular dated 10.09.2004, which clarifies that free home delivery of food by hotels and restaurants would not be subject to service tax; iv. Reliance has also been placed on the Circular dated 28.02.2011, issued at the time of introduction of restaurant services in 2011, which clarifies that pick-up or delivery of foods or goods sold at MRP would tantamount to mere sale and would be outside the purview of service tax; v. Reference has also been made to the clarification issued to a restaurant by the Deputy Commissioner, Central Excise & Service Tax Division, Chandigarh by letter dated 13.08.2015; vi. Payment of VAT and service tax is mutually exclus....
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.... under section 66E(i) of the Finance Act and that the exemption under the notification dated 20.06.2012, as amended by notification dated 01.03.2013, is for the activities performed in non air-conditioned restaurant and any activity related to food or any article for human consumption performed in restaurants having air-conditioning facility would be subject to service tax. In the present case, the appellant is providing restaurant services whereby food and other articles for human consumption and drinks are supplied by take-away services. The activities performed by the appellant are also preparations and supply of food items, for which the services chefs are required. Thus, the consideration charged by the appellant for the take-away food items involves the value of goods and material used by the appellant for the preparation of food items as also the service portion of the preparation, packing and delivery of food and would fall under 'restaurant services'. 9. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 10. The period involved in this appeal is from April 2014....
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....and furniture, air-conditioning, well-trained waiters, linen, cutlery and crockery, music, live or otherwise, or a dance floor. The customer also has the benefit of personalized service by indicating his preference for certain ingredients e.g. salt, chilies, onion, garlic or oil. The extent and quality of services available in a restaurant is directly reflected in the margin charged over the direct costs. It is thus not uncommon to notice even packaged products being sold at prices far in excess of the MRP. xxxxxxxxxxx 1.4 The new levy is directed at services provided by high-end restaurants that are airconditioned and have license to serve liquor. Such restaurants provide conditions and ambience in a manner that service provided may assume predominance over the food in many situations. It should not be confused with mere sale of food at any eating house, where such services are materially absent or so minimal that it will be difficult to establish that any service in any meaningful way is being provided. xxxxxxxxxx 1.6 The levy is intended to be confined to the value of services contained in the composite contract and shall not cover either the ....
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....iable as it would be a case of sale and the relevant portions of the judgment are as follows: "This batch of Writ Petitions involves an interesting question as to the liability to service tax under the Finance Act, 1994 (in short 'Act'), on food that is 'taken away' or collected from restaurants or eateries, in parcels. ***** 5. According to the petitioners, there is no liability for sale of food at the take-away counter or by parcel. They would state that the sale of packaged food constitutes pure trading activity and there is no component of service involved therein. They rely on the definition of 'service' under Section 65B(44), which excludes the transfer of title in goods by way of sale. In the light of this exclusion, parcel sales or take away food would stand outside the ambit of service tax. 6. According to them, in parcel sales, there could be no artificial splitting of transactions between one of 'service' and one of 'sale' with the attempt to bring the same under the purview of the former. The petitioners rely on letter bearing No.DOF 334/3/2011-TRU dated 28.02.2011 which had, according to them, clarified that service tax is not intend....
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....o.147 of 2019 dated 25.03.2019 passed by the Commissioner (Appeals), Coimbatore and Order in Appeal No.16 of 2020 dated 23.03.2020 passed by the Commissioner (Appeals), Coimbatore. In some cases, I am informed that appeals have not been filed by the Department and thus the prevailing view, even within the Department is that there would be no service tax liability on take away food." (emphasis supplied) 19. It is seen that in case of take-away of food, the appellant sells the food/packaged items, as chosen by the customer, over the counter and this would amount to sale of goods. Services such as dining facility, washing area, clearing of the tables after the food has been eaten are, therefore, not involved. The activities of preparation of food and packing thereof by the appellant in case of take-away items are conditions of sale of such food, wherein the intention of the customer is to merely buy such packaged product from the appellant, and not to avail any restaurant services. 20. Learned counsel also pointed out that this issue was also examined by the Commissioner (Appeals) in Appeal No. 147/2019-ST decided on 25.03.2019 in the matter of Anjappar Chettinad, which order....
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....;s case the activity is neither falling under restaurant service as the food is not consumed in the restaurant/any part of the restaurant, nor under outdoor catering as the food/beverages served in the customer's premises. Under the circumstances, I am of the opinion, the appellant is not liable to pay service tax on such takeaway/ parcel/home delivery sales." (emphasis supplied) 21. Thus, when the department has accepted the decision of the Commissioner (Appeals) that no service tax is leviable on take-away food items, it is not open to the department to take a contrary stand in this appeal. 22. In view of the aforesaid discussion, it has to be held that no service tax can be levied on the activity of take-away of food items as it would amount to sale and would not involve any element of service. 23. The next issue is that required to be considered is as to whether permitting an associated enterprise to use a part of the premises for the sale of the product would amount to sub-letting and, therefore, the consideration received would be leviable to service tax under the category of 'renting of immovable property'. 24. It needs to be noted that the appellant had....