Custom, Excise & Service Tax Tribunal
M/S Indian Coffee Workers vs Cce, Allahabad on 29 August, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. 1 Date of hearing/decision: 29.08.2013 For Approval and Signature: Honble Mr. Justice G. Raghuram, President Honble Mr. Sahab Singh, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Service Tax Stay No. 2160 of 2012 and Service Tax Appeal No. 846 of 2012 (Arising out of order in Appeal No. 65/ST/ALLD/2012 dated 23.03.2012 passed by the Commissioner (Appeals), Central Excise, Allahabad). M/s Indian Coffee Workers Appellants Co-operative Society Limited Vs. CCE, Allahabad Respondent
Appearance: Sh. Alok Barthwal & Sh. Manish Saharan, Advocates for the appellant Sh. Govind Dixit, DR for the Revenue Coram: Honble Mr. Justice G. Raghuram, President Honble Mr. Sahab Singh, Technical Member Final Order No. 57441 /2013 Per: Justice G. Raghuram:
Heard Shri Alok Barthwal, ld. Counsel for the petitioner/ assessee and Shri Govind Dixit, ld. DR for the respondent/ Revenue. As elaborate arguments on the substantive appeal have been addressed, we consider it appropriate to dispose of the appeal itself at the stage of considering the stay application. In the circumstances, we waive the requirement of pre-deposit and proceed to dispose of the appeal.
2. This appeal is filed against the order-in-appeal dated 23.03.2012 of the Commissioner (Appeals), Central Excise, Allahabad whereby the adjudication order dated 16.09.2011 passed by the Joint Commissioner, Central Excise, Allahabad is confirmed and the appeal preferred by the assessee, dismissed.
3. The appellant/ assessee is a Co-operative Society having its Head Office in Jabalpur, Madhya Pradesh. Under an agreement with the National Thermal Power Corporation Limited (NTPC), the assessee agreed to provide food to NTPC employees from a premises provided by NTPC under a license granted to the assessee in the NTPC premises at Rihand Nagar within the territorial limits of the Commissionerate at Allahabad. Revenue assumed that the assessee provided the taxable services as outdoor caterer, defined in 65(76a) read with Section 65(24) of the Finance Act, 1994. Proceedings were initiated by issuing a show cause notice dated 05.04.2011 in respect of the period 01.10.2009 to 30.09.2010, proposing levy of service tax, interest and penalties as specified in the notice. The assessee denied the liability and contended that it did not provide outdoor catering service. This plea was rejected and the adjudication order confirmed service tax levy of Rs. 10,40,803/- besides interest under Section 75; penalty under Sections 77(1)(a) and 77(2) apart from a penalty equivalent to the service tax liability assessed, under Section 78 of the Act. The assessee had also provided an identical service to M/s Lanco, Anpara. Therefore proceedings were initiated in respect of amounts received by the assessee both from NTPC and Lanco during the aforesaid period. On the admitted factual scenario the assessee neither applied for or obtained registration from the act or filed return disclosing the amounts received for providing the service nor remitted the service tax liability for the period in issue.
4. The assessee claimed to have provided canteen services in the premises of the service recipients under contracts with NTPC and Lanco. Under the terms of the contract rate of food articles sold to its customers was fixed by NTPC and Lanco, who undertook to pay the salaries of the staff deputed; provide accommodation for persons engaged in running the services; reimbursement of the cost of cleaning items, gas cylinders etc. The cost of the food items supplied to the customers was however not reimbursed. On this factual basis, the assessee contended that it had not provided the taxable service. The adjudicating authority disagreed and levied tax and imposed interest and penalties. The appellate authority concurred with the adjudicating authority.
5. Section 65(24) of the Act defines a caterer to mean 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. Section 65(76a) defines outdoor caterer to mean 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. During the relevant period Section 65(41)(n) specified the relevant taxable service to mean any service provided to a client, by an outdoor caterer.
6. On an interactive analysis of the provision of Sections 65(24); 65(76a) and 65(41)(n), the inference is compelling that where any person supplies either directly or indirectly, any food for any purpose or occasion at a place other than the providers own place and including the place provided by the person receiving such service; i.e. in relation to outdoor service provided by an outdoor caterer to a client, the taxable value shall be the gross amount charged by such caterer from the client for services in relation to such catering. A taxable service comes into existence in the circumstances and the amount received from the service recipient for providing such service constitutes the taxable value.
7. It is the admitted position that the appellant had received consideration in money from the NTPC and Lanco for providing outdoor catering service to them, within the meaning of the said expression as defined in the relevant provisions, already adverted to.
8. On the aforesaid analysis the adjudication order as confirmed by the Commissioner (Appeals) is impeccable and warrants no interference.
9. Learned Counsel for the appellant contended that the Commissioner, Central Excise, Allahabad has no jurisdiction to adjudicate the assessed liability since office of assessee is located within the territorial limits of the Jabalpur Commissionerate. This challenge to the territorial jurisdiction of the adjudicating authority was addressed neither before the adjudicating authority, the appellate authority or even before this Tribunal, in the grounds of appeal. The issue whether the Allahabad Commissionerate had the jurisdiction is not a pure question of fact simplicitor. It is a mixed question of fact and law. Further, admittedly the outdoor catering services provided by the assessee were within the territorial limits of the Allahabad Commissionerate and cause of action for recovery of service tax due occurred within the territorial limits of the Allahabad Commissionerate. Section 21 of The Code of Civil Procedure (though not applicable to proceedings under the Finance Act, 1994) provides a guidance as to issues pertaining to jurisdiction. The provision of the Code of Civil Procedure enjoins that no objection as to the place of suing shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement, and unless there has been a consequent failure of justice. Similar bar to raising objection as to the pecuniary limits of jurisdiction are set out in Section 21(2) of The Code of Civil Procedure and with regard to the competence of the executing Court under Section 21. The normative jurisprudence on objections to pecuniary jurisdictions derived from provisions of The Code of Civil Procedure may provide guidance to these proceedings as well. Thus the objection to jurisdiction being raised for the first time orally before this Tribunal and there being no failure of justice occasioned by the Allahabad Commissionerate exercising jurisdiction in respect of the provision of a service which had occurred within the limits of the territorial jurisdiction of the said Commissionerate, we are disinclined to invalidate the proceedings on the basis of this contention.
10. Learned Counsel for the appellant/ assessee also contends that levy of penalties under Sections 77 and 78 is without basis since there was no wilful suppression of relevant facts nor a violation of the provisions of Act with an intent to evade payment of service tax and that in the circumstances the authorities below ought to have exercised the discretion under Section 80 to avoid levy of penalty. Reliance is placed on the judgment of this Tribunal in Rajeev Kumar Gupta vs. CCE, Jaipur 2009 (16) STR 26 (Tri. Del.) to contend that the entire facilities relating to maintenance of canteen including furniture, utensils, and also gas, electricity having been provided by the service recipient and the assessee having engaged himself merely in preparation and serving the food items at the company premises, which was held to fall outside the category of outdoor catering service and no tax liability enures. On the facts and the analysis set out in the decision in Rajeev Kumar Gupta it is apparent that the assessee therein was himself engaged in the preparation of food items in the company premises with all the infrastructure for such service having been provided to the service recipient. It is not the case of the assessee herein that the assessee, a co-operative society was itself engaged in preparing the food and serving the same to the NTPC or Lanco employees. It had deputed personnel to perform these services for the benefit of service recipients. In Raj Kumar Jain vs. CCE, Jaipur-I 2009 (13) STR 154 (Tri. Del.), this Tribunal rejected the contention of the assessee, to immunity to tax for having provided outdoor catering service on the ground that the assessee therein was providing outdoor services in the premises of the service recipient and therefore the service falls within the specified taxable service. A similar view is reiterated in an interim order in Vaigai Canteen Vs. CST, Trichy 2009 (16) STR 272 (Tri. Chennal). Again in Sai Flight Services Pvt. Ltd. vs. Superintendent of Central Excise 2006 (4) STR 429 (Ker.), the Kerala High Court held that the petitioner (therein) was admittedly engaged in supply of food and beverages to air companies for inflight service to passengers on board and therefore the taxable outdoor catering service had occurred.
11. In the totality of circumstances, we are not persuaded as to existence of any circumstances justifying a bonafide belief of the appellant that on a true and fair construction of relevant provision of Sections 65(24), 65(76a) and Section 65(41)(n), the appellant was not providing the taxable outdoor catering service. The levy of penalties is thus vitiated by no error.
12. On the aforesaid analysis there is no merit in the appeal. The appeal is dismissed. No costs however.
(Justice G. Raghuram) President (Sahab Singh) Technical Member Pant