AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 625
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....no food and beverages were sold at their FL3 licensed bar and only Liquor was served in the bar. However, the Appellant furnished the details of collections made in their bar to the Department. 1.3 It appeared to the Department that the Appellants were serving snacks and beverages inside the licenced bar and hence services rendered at the bar were covered under "Restaurant Service" w.e.f. 01.05.2011 and hence the Appellant was required to pay Service Tax at the appropriate rates. Hence the Total Taxable value for the period from 01.05.2011 to 30.09.2012 worked out to Rs.24,31,767/- and after extending applicable abatements of 70%, the total Service Tax payable worked out to Rs.2,69,077/-. 1.4 Therefore, a Show cause Notice dated 12.06.2013 was issued to the Appellant seeking to demand the service tax of Rs.2,69,077/- for the period from 01.05.2011 to 30.09.2012 under Section 73 of Finance Act, 1994 (ACT) with applicable interest under Section 75 and to impose penalty under Section 76 of ACT ibid. Subsequently, a statement of demand dated 25.03.2014 was issued for the period from 01.10.2012 to 31.03.2013 demanding Service Tax of Rs.1,18,517/- under Section 73 of the ACT with i....
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.... order of Commissioner (Appeals) in Appeal No. 149/2013-ST dated 20.02.2014 which held that no service tax is leviable on the Appellants. viii. It was pointed out that the impugned order ignored the ratio of the decision in the case of Commissioner of Service Tax, Bangalore Vs. LSG Sky Chef Pvt. Ltd. [2012 (27) STR (5) (Kar.)] wherein it was held that the "respondent was eligible to claim deduction in respect of goods portion" while discharging Service tax liability. 3. The Ld. Counsel Shri S. Murugappan appearing for the Appellant submitted that the levy of Service Tax under Section 65(105(zzzv) of the Finance Act, 1994 was only on the specified category of restaurant and not on the permit room or whatever be the facilities attached to that and the same concept continued in the negative services regime as the essence of the statutory provision was in-built in the declared services under Section 66 E read with Sl.no.19 of the mega exemption Notification no.25/2012-ST. It was pointed out that Service Tax levy will not sustain in view of the clarifications issued by the Board Circular dated 10.05.2011. Finally, it was submitted that the present issue was squarely covered ....
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....fferent entities but were two different places in the same establishment and that the bar is only an extension of the restaurant. 4.4 Finally, it was submitted that even assuming that restaurant is a separate entity and does not have a licence to serve liquor, the food and beverages served in the bar are liable for charge of Service Tax as they have air-conditioning facility also. Hence it was prayed to dismiss the appeal filed by the Appellant by upholding the impugned order. 5. Heard both sides and carefully considered the rival submissions and evidences on record. 6. The issues that arise for decision in this appeal are:- i. Whether the activity rendered by the Appellant at its licenced bar qualifies for demand of Service Tax under, "Restaurant Service‟ in terms of provisions of Section 65(105)(zzzzv) of the Finance Act, 1994, up till 30.06.2012? ii. Whether the appellant is eligible for exemption under Notification No. 25/2012-ST dated 20.06.2012, which is effective from 01.07.2012? 7.1 It is expedient to examine the legal provisions relevant to this appeal. The appellant was found to be providing "Restaurant Service" w.e.f. from 01.05.2011. ....
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....ses (a) to (q) of the Section, as comprising the negative list. The service provided by a restaurant in relation to serving food or beverage in its premises does not figure in the negative list under Section 66D. 7.5 Section 65B(44) of the Act defines 'service' as follows :- (44) "service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely,-- (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (ii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force. Thus, as per the above definition, "service" includes a declared service. As per Section 65B(22), "declared service" means any activity carried out by a person for another person for consideration and declared as such under Section 66E." Section 66E specifies nine activities, listed under clauses ....
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.... manner as a part of the activity at a restaurant, shall be 40% of the total amount charged for such supply. 7.9 From the provisions referred to above, it is seen that Service Tax would be leviable in the following circumstances:- Period Circumstances From 01.05.2011 to 30.06.2012 If a restaurant, by whatever name called, having air-conditioning in any part at any time of the financial year and having licence to serve alcoholic beverages, provides any service in relation to serving food or beverage in its premises.- Section 65(105)(zzzzv) Value: 30% of the gross amount charged, i.e., after allowing abatement of 70% under Notification No. 1/2006- ST dated 01.03.2006 as amended by Notification No. 34/2011-ST dated 25.04.2011 From 01.07.2012 to 31.03.2013 'Declared service' covers service portion in an activity wherein food or any other article of human consumption or any drink is supplied as part of the activity.- Section 66E(i). Exemption from tax, granted under Notification No. 25/2012-ST (Sl. No.19), is inapplicable to services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess having (1) the facility of air-condit....