August 2013
2013 (30) S.T.R. 513 (Tri.–Delhi) Ambuj Hotels & Real Estate P. Ltd. vs. Commissioner of Central Excise, Allahabad –
By Puloma Dalal, Jayesh Gogri, Chartered Accountants
Reading Time 2 mins
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Stay – ‘Outdoor Caterer’s Service’ – Service tax on value of ready confectionaries sold on MRP to railway passengers onboard – activity amounts to ‘sale’ – Stay granted. Facts:
The appellant was a caterer duly registered with service tax department as an “outdoor caterer” provided food items and served meals to the passengers onboard of Shatabdi/Rajdhani and mail/Express trains which also included sale of confectionary items such as chips, biscuits etc. The Revenue contended to levy tax on the value of sale of readymade items by adding it to the assessable value. The appellant submitted that the demand was mainly on account of tax demanded on sale of items like potato chips, biscuits, cakes etc. sold by them to the passengers and a small amount on account of value of newspaper sold to IRCTC for giving to the passengers and also contended that in respect of these activities, there is no catering involved and it is simply a case of sale of items on which they appropriate paid VAT
Held:
The Tribunal stayed the recovery and held that sale of packaged items like biscuits, cakes, potato chips etc is a distinct activity from serving meals for which no separate service charges were charged and thus activity was one of sale and service tax is not payable on the value of items sold (after allowing 50% abatement as done in the impugned order).
