AMBEDKAR INSTITUTE OF HOTEL MANAGEMENT Vs CCE & ST-TIOL

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2015-TIOL-1593-CESTAT-DEL
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST BLOCK NO 2, R K PURAM, NEW DELHI
COURT NO 1
Service Tax Stay Application Nos. 51876 & 51923 of 2014 with
Service Tax Appeal Nos. 51574 & 51635 of 2014
Arising out of Order-in-Original No.CHD-CEX-001-COM-039-40, Dated: 5.12.2013
Passed by the Commissioner, Central Excise And Service Tax, Chandigarh
Date of Hearing: 15.6.2015
Date of Decision: 15.6.2015
M/s AMBEDKAR INSTITUTE OF HOTEL MANAGEMENT
Vs
COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, CHANDIGARH
Appellant Rep by: Shri Rakesh Khanna, CA
Respondent Rep by: B B Sharma, DR
CORAM: G Raghuram, President
Rakesh Kumar, Member (T)
ST - Assessee are preparing meals as per fixed menu which are to be served in various
schools of Chandigarh Administration under mid day Meal Scheme of Government - There
is neither any allegation nor any evidence to show that assessee had prepared meals at
schools where same were to be served or was in any manner involved in serving the
meals - Meals prepared by them are simply supplied at pre-determined rates to Education
Department - Since the assessee are preparing mid day meals in their Institute and not in
schools where the meals are served are not involved in serving of meals in any manner,
they are not covered by definition of "outdoor caterer" and hence their activity of
preparing and supplying meals for mid day scheme would not be covered by definition of
taxable service under Section 65(106(zzt) of FA, 1994: CESTAT
Appeals allowed
FINAL ORDER NOS. 51955-51956/2015
Per: Rakesh Kumar:
The facts leading to these appeals and stay applications are in brief as under:
1.1 The appellant are an autonomous body registered under the Societies Act, 1860. They
are a part of the Ministry of Tourism and are managed by the Board of Governors
consisting of representatives from Central Government and Union Territory
Administration, Chandigarh. The appellant Institute, in terms of its memorandum of
Association and as per the objectives listed therein, is associated, among other things,
with the nutritional extension and developmental work and provides mid day meal to the
schools of Chandigarh Administration under the Government scheme. The appellant
Institute prepares cooked food as per the fixed menu and supplies the same to various
schools for which they received payment at certain rates. The Department was of the
view that this activity of the appellant is outdoor catering service taxable under Section
65(105)(zzt) of the Finance Act, 1994 read with Section 65 (77a) and Section 65(24) ibid.
Besides this the appellant were also making available the space in their premises to
various persons for their functions. The Department was of the view that this activity of

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AMBEDKAR INSTITUTE OF HOTEL MANAGEMENT Vs CCE & ST-TIOL

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the appellant is taxable under the Mandap Keeper Service. It is on this basis that show
cause notice dated 12.03.2012 was issued for demand of Service tax amounting to Rs.
56,93,305/- for the period from October 2006 to March 2007 alongwith interest on it
under Section 75 and for imposition of penalty on the appellant under Section 76, 77 and
78 ibid and another show cause notice dated 17.04.2013 were issued to the appellant for
demand of service tax amounting Rs.12,57,899/- for the period from 2011-12 alongwith
interest under Section 75 ibid and also for imposition of penalty on them under Section
76, 77 and 78 of the Act.
1.2. The above show cause notices were adjudicated by the Commissioner by a common
order-in-original dated 06.12.2013 by which while in respect of show cause notice dated
12.03.2012 service tax demand of Rs.37,38,222/- was confirmed after adjusting the
cenvat credit of Rs. 19,55.083/- and service tax demand of Rs. 7,83,131/- was confirmed
in respect of second show cause notice dated 17.04.2013 after adjusting the cenvat credit
of Rs.4,74,768/-. Thus, the total service tax demand confirmed against the appellant is
Rs.45,21,353/- alongwith interest. The Commissioner also imposed penalty of Rs.
45,21,353/- on the appellant under Section 78 besides imposition of penalty of Rs.
10,000/- under Section 77 of the Act. Against this order of the Commissioner these
appeals alongwith stay applications are preferred.
2. Heard both the sides.
3. Though, the appeals are listed for hearing of the stay applications only, after hearing
the matter for some time, the Bench was of the view that the matter can be heard for
final disposal. Accordingly, the requirement of pre-deposit is waived and with the consent
of both the sides, the matters are heard for final disposal.
4. Shri Rakesh Khanna, Chartered Accountant, ld. Counsel for the appellant, pleaded that
the appellant Institute only prepares the cooked meal as per the fixed menu to be
supplied to various schools of Chandigarh Administration; that the meals served in the
schools are prepared only in the Institute and not in the schools where the same are to be
served, that the appellant are not involved in serving of the meals in any manner; that in
terms of Section 65(105) (zzt), taxable service means any service provided or to be
provided to any person, by an outdoor caterer, that under Section 65(76a) outdoor
caterer means any person 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, that under Section 65(24), a 'caterer' means any
person who supplies, either directly or indirectly, any food, edible preparations, alcoholic
or non-alcoholic beverages or crockery and similar articles or accoutrements for any
purpose or occasion; that what is taxable is the service provided by an outdoor caterer
and for this purpose the outdoor caterer must provide the service at a place other than
his own; that since the appellant was neither preparing the meals at the schools nor are
supplying any crockery etc. for this purpose nor they are not involved in serving of the
meals in the schools, their activity is not covered by the Section 65(zzt); that as regards
Mandap Keeper service, they are covered by the definition of mandap keeper, but during
the period of dispute their turnover on account of this service is well within the exemption
limit of Notification No. 6/2005-ST and that in view of this the demand on account of this
service is also not sustainable. It was, therefore, pleaded that the impugned order is not
sustainable.
5. Shri B. B. Sharma, ld. DR defended the impugned order by reiterating the findings of
the Commissioner.
6. We have considered the submissions of both the sides and perused the record. From
the facts stated in the show cause notice as well as in the order-in-original, it is seen that
the appellant are preparing the meals as per the fixed menu which are to be served in
various schools of Chandigarh Administration under the mid day Meal Scheme of the
Government. Neither there is any allegation nor there is any evidence to show that the
appellant had prepared the meals at the schools where the same were to be served or
was in any manner involved in serving the meals. Meals prepared by them are simply
supplied at the pre-determined rates to Education Department. The service which is
covered under Section 65(105)(zzt) is the service provided or to be provided to any

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person by an "outdoor caterer" and not by any caterer. The outdoor caterer as defined in
Section 65(76a) means 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. Since the appellant are preparing mid
day meals in their Institute and not in the schools where the meals are served are not
involved in serving of the meals in any manner, in our view they are not covered by the
definition of "outdoor caterer" and hence their activity of preparing and supplying meals
for mid day scheme would not be covered by the definition of taxable service under
Section 65(106(zzt). Accordingly the duty demand on this count would not be sustainable.
7. As regards the mandap keeper service alleged to have been provided by them during
the period of dispute, we find that during each financial year during the period of dispute
its turnover is well within the threshold limit of Notification No. 6/2005-ST and therefore
they will be exempted from service tax.
8. In view of the above discussion, the impugned order is not sustainable. The same is set
aside. The stay applications as well as the appeals are allowed.
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