Custom, Excise & Service Tax Tribunal
M/S. Saj Flight Services (P) Ltd vs Cst, Chennai on 18 August, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
S/80/2008
(Arising out of Order in Original No. 22/2008 dated 13.03.08, passed by the Commissioner of Service Tax, Chennai).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
_________________________________________________________
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M/s. Saj Flight Services (P) Ltd. : Appellant
Vs.
CST, Chennai : Respondent
Appearance Shri G. Natarajan, Adv., for the appellant Shri V.V. Hariharan, JCDR, for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 18.08.09 Date of decision : 18.08.09 Final ORDER No._____________ Per: Chittaranjan Satapathy, Heard both sides. The appellants are supplying food on broad the flights of M/s. Air India. It is not in dispute that the appellants are coming under the category of Outdoor Catering Service provider. However, the question raised in this case is on what part of the gross value, the service tax is chargeable.
2. The impugned order passed by the adjudicating Commissioner demands service tax on the entire value received by the appellants from M/s. Air India. It has been argued on behalf of the appellants that part of the value relates to supply of food items on which they are paying VAT/Sales Tax. They have also claimed benefit of Notification No.12/03 dated 20/06/03.
3. The Ld. Advocate Shri G. Natarajan, appearing for the appellants states that the adjudicating Commissioner has denied the appellants the benefit of Notification No. 12/03. He also states that the details of food items supplied by the appellants were furnished to the adjudicating Commissioner but he has not taken the same into account even though the appellants have paid VAT/Sales Tax on the same. He argues that in respect of that part of the charges, which represent the value of food items and on which VAT/Sales Tax has been paid, cannot form the chargeable value for service tax. He also argues that other in flight catering service providers have been extended the benefits of Notification No. 12/03, whereas only the appellants are being discriminated against by the department. In support of his argument, he cites decisions of the Tribunal in the case of M/s. LSG Sky Chefs (India) Pvt. Ltd. Vs. CST, Bangalore Final Order No. 24/09 dated 16.01.09 and in the case of The Grand Ashok Vs. CST, Bangalore Final Order No. 17/09 dated 12.01.09.
4. Heard the Ld. JCDR, Shri V.V. Hariharan. He fairly states that the appellants are entitled to the benefit of Notification No. 12/03. He has no objection to the case being remanded to the lower authority for extending the benefit of notification No. 12/03 and for quantification of the differential tax, if any, payable by the appellants.
5. We have considered the arguments from both sides and perused the case records including the cited decisions. We find that in the cited decisions of the Tribunal, Outdoor Catering Service providers similarly placed have been allowed the benefit of Notification No. 12/03. In these decisions, the Tribunal has held that under the catering contracts, the appellants supply food also and in terms of the Constitutional provisions, sales tax is leviable on the supply of such foods, and further that once sales tax is leviable on the supply of food, service tax cannot be levied on the same. In the cited decisions of the Tribunal, it has also been held that the Commissioner has not examined correctly the applicability of the Notification No. 12/03, even though the cost of the food items supplied is clearly available in the records. The Tribunal has finally held that the Commissioners finding that the appellants are not entitled to the benefit of Notification No. 12/03, is not in order.
6. We find that the present appellants are similarly placed as M/s.
LSG Sky Chefs (India) Pvt. Ltd and M/s. The Grand Ashok, whose cases have been decided earlier holding that they are entitled to the benefit of Notification No. 12/03 dated 20.06.03. In this case also, food items are being supplied under the contract and VAT/Sales Tax is being paid on the same. Hence, following the ratio of the aforecited decisions, we hold that the present appellants are also entitled to the benefit of Notification No. 12/03. However, since the lower authority has not examined the details furnished by the appellants for the purpose of granting the benefit of Notification No. 12/03, we set aside the impugned order, and remand the matter to him for a fresh decision. He shall give an adequate opportunity of hearing to the appellants and determine the differential amount, if any, to be paid by the appellants after granting them the benefit of Notification No. 12/03.
7. The appeal is allowed by way of remand.
(Operative part of the order pronounced in the open Court on 18.08.09)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
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