Commissioner Of Service Tax vs M/S Lsg Sky Chef India Pvt Ltd on 20 April, 2011

[Cites 2, Cited by 3]
Karnataka High Court

Commissioner Of Service Tax vs M/S Lsg Sky Chef India Pvt Ltd on 20 April, 2011

Bench: N.Kumar, Ravi Malimath

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erder passed by CESTAT, South Zone Bench. Bang33 e&'e in
Final cmzier Na. 1322/{)9 dated 28/10/2009.  

This {EBA eeming em for hearing_'_--'..

RAVI MALIMATH 3., made the fsiI<:>Wing:~

JUIDGMENTL' 

This appeai is filed by tiieiifevernxze---being: by 

the cammen order passeei b}%Wt'1*ie. e;g3i11s"{f the very
same assessee holding   0§:§{'V:.<3_ee§%*eatering service
the cast sf  as sale of goods
and it canrgziit   tag; in Vi€W' of the ratio of

the Su,preemce C0u'i*i:'.in  Casefv

 u 'The engaged in the activity of

§1"{)\5ﬂ§.if1g <:é;:e.ri11gV'*se'rvie'e falling under 'suit deer caterer'

" V'  €%a,§é;i?3.%)1<§._"L1I}€5i§5§F se¢'t:::'::'55 (76a} of the Finance Act, 1994. On

 S£j'I'_'I.'V1"£--§f:1.§"._ «i'i):€f'6CO1"dS by {he Anti Evasion Wing cf the

C'e§1émis.sfes:éef'aie, it was :*e<;ea1ed ihai the assessee had 110%

 madepajymezlt cf service is}: on the basis of the eerree: value
  ﬁ~:.e iaxable services. The service tax liability haé ':0 be

 ;;3s.i§ an 'the basis of tile grass amsimm; eeﬁeeted {rem {he



in respect of the Value of feed and beverages served :0_ the
Airlines on payment of VAT' That in a transaction 
f0o<:l, the elemem of service in Connection with  ~
enly {:3 the extent of handling and...leaeli:--i§"'§~f;T'f3g;{£  
beverages an the aircraft. Hence they  lg 
that extent. The assessing aui-"lxeljlty  to  
that in terms of Section 67 0f  the  eire liable

to pay service tax on  i.2lA,:f1egsr_1lfj'«realiseAel "from the
Various Airlines en aCC.Q§lif'1?i_  jVeeite1*ing service
provided by   prescribes that
the value     be the gross amount
ehargecf'lV'l:jlf}V  the exemption
claimedvvvlbyfllihe  'Notification 12/2003 dated

20~6~2_€}03  'leg2V1lIy'A'--._e:ﬁ$:ﬁetainable. Accordingly, the

 a.utho1'it'y~---------eonfirmed the demand along with

i:::efeel;"2;fld;'pef;alty. Aggrieveci by the same, the assessee

pfe.fe:~rledV  to {he Tribunall The Tribunal held ihai

[ the };£:s,sésVsé'é is entitled E0 the benefit; ef Neiifieation

2v£33{}3. That there is inclusion of value ef goeds self}

. $33: the aeseesee and in View ef 'Elle separate inveieee raised

5Eg'::§j""



'J!

far the food and beverages having been supphieei anei having

been paid for sseparately. the f<:}<:>::i supplied should 

as sake of goods; and hence no service tax ca:1_b:e 1e'v:ee._f':e_._ ' .

that extent. By relying an the Ju<;1A(g§1fr:er:t.'<jI"v'*:eE.iebHor1'}31€." 

Supreme Ceurt; in the Case Qf  ve;e .I3E§E'EeQ.1"£.'A«

reported in20{36(2) STE 161 {S;C.,_} :he"%2;§eef:: 
12/2003 wag held applicable   Aeeerdinglgfg
the appeai wag allowed'.  per1eA£t:} V was set
aside and  Hence, the

present appeals by the 15'eve;1z.1;'e.    ..

5;' """   'étixriitted to consider the

following. s1iEjst2.r:1i'1e;i'  of iaw: --

".;"':fl?  'VVVi1e{f1erV__:hev0rder of the eesmr :5 legally

'A '.¢_eust3a:::a'tj«E.e and m c:0r1ferm1t:y with the reasons

 _..é§:1d:::§31je'§is§Qf;;s. of the Statute in its intergaretation

'A ('if "Ot:2::?ij_0r:?:' Caéering Services"?

29%



2. Whether, the CEZSTAT was right in no'£; "--_

reeegnising' the fact of euppiy 0? food 

beverages azs an integral activity of "Qef?Vdee:%.'V:"---._V' 5' 

Catering Service" which was recegnised 

Govtof India to have uniibrmit}?E11"'va§u'a£ien.: e:.t;di 

liabiiity {es tax issued a nc2ii::7'§eg:a}: i <:r1TV   

dated 10-092004 read. wifiy  No:::,:':eg:.{qn _
No.1 /2006 dated 1.3.2006 's:p§c:t':ca11;,>= §§r"Q;;:¢1":=_o§¥"
Catering Service by ja}1<:>wing-----.52ﬁfalﬁaiemexit'(sf 5.*3:%
cf the gross value  e<:;_>3f. beverages
supplied. during the    the
taxable s¢?3_7X*:c",/:'7:3.'---_ AA  'A bL V 

3.  x,;-:::é¥.y ofV"i'.Exe:'Vé'tBo§zé'xévhetiier, the CEZSTAT
Waf5'"f'i¥gi";1:.:i;n  theufiehyefit of Notification
No§1zeA2f-20033;'-».A§i'a:§§'::e.ee_:20g6;2oe3 to the eutdoor
catefingé' ser\'n';eeV  

_Therefefe._ it is' clearséhat the question that arises for

. "ve0nsi.det?a:io11in thiséipipeal is as to whether the assessee are

 :_:a1;:s"  tax for the services rendered by him

as 911% does? 'e2'§ﬁ;.e1*ers.

Vi"



6. The identical question with regard to the Eiabi-Iiiy

of the aeseseee towards service tax 30 far as $erViee..:<:neie:*eei~ V

by them with regard te ihe oui door catering is;e«::>:1eei*1ée:i§ "e V'

Came up far censicieraiien before the"Di--visi05§1 Betieifz eVVfvI_;b.isL'~.,

Court in Writ Appeal Nos. 67} {'O.>':'?2é/:i:CIV:'~  

di§PQsed eff by {he order 
consideration and relyjillg   Court
Judgments, the DivisiQv:i'*%3ene--}:. 'i::e1,;_:*t came is the
Conclusion that thevouiiriuee is a eentract
far service   Cf£éi*:1se 29(3) of Article
386 ef the  has to be Heated as
eompeszece  t:1:" 1'e.:'_ vS"t;2;teviegislature is competent to
ievy thezSaV1es  aspect eniy namely, the Value
of thefouod %;:'<ucV_1'es.._  S

 " iﬁfivision Bench heki that out deer catering

eeiieists «:}f"gjec;£€:1s namely: the artieies of feed etc" which

'yxreuié: ;:ei:eii:ute Saie. Hence. the vaiue ef the food articles

'E.i;2a,bie"§er sales tax which the Siaie Gevernmenf; ﬁe liable

_  re. izizgeeeee 'The e1'ihe:* par: of out ﬂee? C;E';E',€1"i1"f:§{ is 'ihe service



rendered by the assessee in bringing the feed artte1es~=_to a

place ﬁesignated by the client, The service so rer3de:'e<fiV:"¥:;}?§:'tb.b:?.<

aseessee, which also includes the cost of ttran$:50rtie1ﬁg-''t}:1,e''9 "

food articles constitutes SEFVKEE. Thte;*efe1*e'_,:
alone, the assessee is liable for set;t%tee;'_'_t;;at:  
entire cost received from the At;:f 1irj1_es. Vtteietieet  be
3 bifurcation with regard to the texéztebefugobteie   service
provided. However,'  dc.i_es  T1fi.(;'a:"f;_ '.bﬂ1p.O¥V€t"" tbe State
Government to ietfy tax gtttbe  mentioned in
the bill. The  sale   transportation
charges alse.   what is the service
aspect  ejate"3.sbee'tV"i'equires to be decided by
the autbteritiest. ottlithjttttegreefter that sales tax could be

imposed 0rt'the'veQs't food articles arrived at and the

'W t_vre:r1V:4ztb,ir;g'e3;tent ittctmsiing transportation is to be treated as

 Therefere, the Ceurt declared that a

eamtmet f"C::?V."t;:ut:= 5001' eatemrtg "is a, composite contract: whicf/2

.V Jf"a£Zs'.t:ttde2f Sttbetattse {f} afeiattse (29:82 ofztrttcte 366 cf' the

 vtjatstttzttteibn Qf' India anci service tax is payable on service





. 'V RSKQ; 

9

aspecf and sales {ax is payable on deemed sales ClS}2{fC'.{T Cé{1(i3,

ii; is not an inciivisible corcéraci;

8. The facts intsoived in  the"'pr€seni.--._§a:;e_ are 

idarztical t9 the fa<:t$ that ar0se_ir1 i;hé"¢?x!'1;ii;_App€:aZ  

Z226/2001, Uncier these CirCuﬁa§{anCeé;, sare
disposed off in ternls  dEL{éd"' 18§»4~2011
passed in Writ Appeal .§C0nsequer1t1yu
the substaniial" {K  in favour 0f

the assesseﬁy arid..__2{ga:i;:_1S't  r.evn:*-hu'e. M .

 .....
3:; T s§;:§E EZJQSE
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Karnataka High Court

Commissioner Of Service Tax vs M/S Lsg Sky Chef India Pvt Ltd on 20 April, 2011

Bench: N.Kumar, Ravi Malimath
