Whether value of pre cooked food includible in the taxable value of services of outdoor catering ?

PJ/Case law/2014-15/2250

Case:- VIHAR AAHAR PVT. LTD. Vs COMMISSIONER OF SERVICE TAX, AHMEDABAD

Citation:- 2013 (32) S.T.R. 563 (Tri. - Ahmd.)

Brief facts:- This stay petition was filed for waiver of pre-deposit of Service Tax of Rs. 18,73,654/-, interest thereof and penalties under Sections 76, 77 and 78 of Finance Act, 1994. The above said amounts had been confirmed on the appellant on the ground that the appellant had rendered the services falling under outdoor catering services and had not discharged the Service Tax liability.

Appellant’s contentions:- Ld. counsel appearing for the appellants submitted that the adjudicating authority was Commissioner of Service Tax, Ahmedabad-I and had confirmed the demand for the services rendered by the appellant at Mumbai, Kanpur and Karnataka. It was his submission that the jurisdictional Commissionerates were only empowered to issue the show cause notice and adjudicate the same. It was his submission that as regards Service Tax demand or liability within the jurisdiction of the Ahmedabad Commissionerate, the calculation was incorrect, inasmuch as the adjudicating authority had considered the value of pre-cooked eatables like biscuits, namkin, etc., for the purpose of value in confirming the Service Tax liability. It was his submission that the appellant had paid VAT on all these items when sold from his outlets. It was his submission that the adjudicating authority had erred in confirming the entire demand and it was also his submission that the appellant’s balance sheet was considered by the adjudicating authority to confirm the demand without specifically indicating under which head the services were rendered. He submitted that in the decision of the Tribunal in the case of Integral Construction Company - 2010 (17) S.T.R. 380 (Tri. - Bang.), would be applicable for the purpose of jurisdiction and the case of LSG Sky Chefs (India) Pvt. Ltd. - 2010 (18) S.T.R. 37 (Tri.-Bang.), for the purpose of non-inclusion of the items on which VAT was paid.

Respondent’s contentions:- Ld. D.R. reiterated the findings of the adjudicating authority.

Reasoning of judgment:- On perusal of the records, the Tribunal found that the adjudicating authority had confirmed the demands which were beyond his jurisdiction and fell within the jurisdiction of various other Commissionerates. They were not shown any notification or circular issued by Board authorizing or directing the Ahmedabad-I Commissioner to issue show cause notice and adjudicate the same. In the absence of any such notification, in their view, the jurisdiction exercised by Commissioner of Service Tax, Ahmedabad-I for confirming demands of other Commissionerates seemed to be beyond his jurisdiction. Be that as it may, they also found that the appellant had also not produced the decision of the Tribunal in the case of Integral Construction Company before the adjudicating authority. We also find strong force in the contentions raised by the ld. Counsel that for the demand within the Ahmedabad-I, requantification needs to be done as the appellant’s claim of selling the biscuits, namkin, etc., had been accepted by the adjudicating authority, but he had not given any due weightage to such submission and for calculation of gross value of tax liability. We find that entire issue needs to be considered by adjudicating authority.
In view of the foregoing, the impugned order was set aside and without expressing any opinion on the merits of the case and keeping all the issues open, we remand the matter back to adjudicating authority to reconsider the issue, after following the principles of natural justice.

Decision:-Appeal allowed by way of remand.

Comment:- The analogy drawn from the case is that the value of pre cooked food shall not be considered while calculation gross tax liability from outdoor catering service if assessee pays VAT on all these items when sold from his outlets. Moreover, the adjudication is necessarily required to be completed by the jurisdictional central excise officers. Hence, the matter was remanded to examine the above stated facts.

Prepared by: Ranu Dhoot

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PJ/Case law/2014-15/2250

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