Custom, Excise & Service Tax Tribunal
Cgst & Ce Agra vs Ms Indian Bites on 11 November, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Cross Application No.70081 of 2021
(On behalf of the Respondent)
In
Service Tax Appeal No.70405 of 2020
(Arising out of Order-in-Appeal No. 83-ST-APPL-LKO-2019-2020 dated
05/05/2020 passed by Commissioner (Appeals) Customs, CGST & Central
Excise, Lucknow)
Commissioner, Central Excise, Agra .....Appellant
(113/4 Sanjay Place, Agra, Uttar Pradesh, 282002)
VERSUS
M/s Indian Bites ....Respondent
(Near Tulsi Cinema, Bye Pass Road,
Agra, Uttar Pradesh 282002)
APPEARANCE:
Shri Santosh Kumar, Authorised Representative for the Appellant
Shri Sambhu Chopra, Sr. Advocate & Ms. Mahima Jaiswal, Advocate
for the Respondent
CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL)
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.-70713/2024
DATE OF HEARING : 11.11.2024
DATE OF DECISION : 11.11.2024
P. K. CHOUDHARY:
The present appeal has been filed by the Revenue
assailing the Order-In-Appeal No. 83-ST-APPL-LKO-2019-2020
dated 05/05/2020 passed by the learned Commissioner
(Appeals) Customs, CGST & Central Excise, Lucknow. The
Respondent-Assessee has filed the Cross-Objection.
2. The facts of the case in brief are that the Respondent-
Assessee is registered with the Department for providing taxable
services. They did not pay service tax on the foods sold on
2 Service Tax Appeal No.70405 of 2020
counter/taken away. The Adjudicating Authority held that sale of
food over the counter is not service and, therefore, there is no
ground to levy service tax on the same.
3. The Original Authority dropped the proceedings
initiated vide the Show Cause Notice. The Department was in
appeal before the learned Commissioner (Appeals) and the
learned Commissioner (Appeals) vide the impugned Order-In-
Appeal observed as under:-
"4. The respondent has submitted in the memorandum of
cross objection which is as under:
(i) The Service Tax department of Chandigarh vide its letter
C. No. ST. 20/STD/Misc/Sevottam/62/12/4693 dated
13.8.2015 has clarified that free home delivery/Pick up of
food is not liable to Service Tax.
(ii) The CBEC categorically clarified in its circular No.
139/8/2011 dated 10.05.2011 that "When the food is served
in the room, service tax cannot be charged under the
restaurant service as the service is not provided in the
premises of the air-conditioned restaurant with a license to
serve liquor. Also the same cannot be charged under the
short term accommodation head if the bill for the food will
be raised separately and it does not form part of the
declared tariff."
(iii) in the above clarification CBEC decided taxability of food
supplied in rooms on the bases of the actual place of supply
and held that for being taxable, the service of supply of food
must necessarily be done within the restaurant premises. If
the food is sold over counter then the transaction would only
involve VAT and no service tax is leviable.
(iv) the Service tax is not liable on take away or home
deliveries, no service element is involved. service tax is
payable only on service portion of transaction. "Services" is
defined under Section 65B(44) of the Finance Act, 1994, the
relevant portion is as following:
(44) "service" means any activity carried out by a person for
another for consideration, and includes a declared service,
but shall not include-
3 Service Tax Appeal No.70405 of 2020
(a) an activity which constitutes merely, (i) a transfer of title
in goods or immovable property, by way of sale, gift or in
any other manner, or
(ii) such transfer, delivery or supply of any goods which is
deemed to be a sale within the meaning of clause (294) of
article 360 of the Constitution of
(iii) a transaction in money or actionable claim;
Therefore, from the above, it can be concluded that
take-away sales purely comes under "sale of goods" not
"sale of services" and hence non-taxable in terms of service
tax.
V) As far as the issue that 'price charged' was same in
'dine in' and 'take away', where on one hand in a restaurant
price includes the proportionate cost of restaurant's various
facilities such as furnishing, waiter services, air- conditioning
etc. (which are not included in take-away sales) on the other
hand take away sales includes various costs such as packing,
food friendly plastics cases, carry bags, condiments such as
ketchup, oregano, chilli flakes, pickles, mouth freshners,
thalis etc. (which are not applicable in the case of dine-in)
and, therefore, the ultimate cost of food items be it dine-in
or take-away, comes to almost the same. It is therefore,
that take-aways are always considered as pure sales in the
entire country (as also clarified by the board on a number of
occasions).
5. Personal hearing was held on 25.02.2020, Shri Prabhakar
Sharma, Superintendent, appeared on behalf of the
appellant and reiterated the grounds of appeal.
6. I have gone through the case record. The contention of
the department that sale of food over the counter would
attract service tax, is without any sustainable legal basis.
Whereas the adjudicating authority as well as the appellant
in the Memorandum of Cross Objection have cited several
departmental clarifications to the effect that over the
counter sale of food will not attract service tax. Hence, I do
not find any merit in the appeal and the same is dismissed."
4. Hence the present appeal filed by the Revenue before the
Tribunal.
4 Service Tax Appeal No.70405 of 2020
5. Heard both the sides and perused the appeal records.
6. We find that the issue is no more res-integra and has been
decided by the Tribunal in the case of M/s Bikanervala Foods
Pvt. Ltd. V/s Commissioner of CGST, Customs & Central
Excie, Delhi-East vide Final Order No.55921 of 2024 dated
07.06.2024 in Service Tax Appeal No.50278 of 2019.
Relevant paragraphs of the order are reproduced below:-
"6. The issue that arises in the present case is whether the
activity of "Take Away" and "Home Delivery" tantamounts to
taxable service under the category of Restaurant Service.
We find that the issue is no longer res integra and has been
decided by this Tribunal in the case of Haldiram Marketing
Pvt. Ltd. Vs. Commissioner of CGST, GST, Delhi East
Commissionerate [2023 (71) GSTL 414 (Tri.-Del.)],
where the facts and circumstances are identical and hence,
the present case is squarely covered by the observations
made therein.
7. In the case of Haldiram Marketing Pvt. Ltd. (supra),
the brief facts noted are that they were engaged in running
food outlets, where packaged food items could be purchased
and also availed restaurant dining facilities. Additionally, the
appellant there also provided the facility of "Take Away "of
food items. On audit, it was noticed that the appellant was
providing services in respect of "Take Away" orders by way
of preparing and packaging food items for the customers.
The Tribunal, after considering the provisions of Section 65
B(44) read with 66E of the Finance Act also considering the
Circular No.334/3/2011- TRU dated 28.02.2011 and the
clarification issued thereafter on 13.08.2015 that the
transaction involving "Pick-up" or "Home Delivery" of the
food items sold by the restaurants are not liable to service
tax, being in the nature of sale only and no amount is
charged for free delivery of food as the dominant nature of
the transaction is that of sale and not service, as the food
items are not served at the restaurant and there is no other
element of service, which is normally offered at the
restaurant. Referring to the earlier decision of the Madras
5 Service Tax Appeal No.70405 of 2020
High Court in Anjappar Chettinad A/C Restaurant Vs.
Joint Commissioner [2021 (6) TMI 226 - Madras High
Court], where also, it was held that service tax would not
be leviable in case of "Take Away" of food items. The
relevant paragaraphs of the said decision are as follows:-
"5. According to the petitioners, there is no liability for sale of
food at the take-away counter or by parcel. They would state
that the sale of packaged food constitutes pure trading
activity and there is no component of service involved
therein. They rely on the definition of 'service' under Section
65B(44), which excludes the transfer of title in goods by way
of sale. In the light of this exclusion, parcel sales or take
away food would stand outside the ambit of service tax.
6. According to them, in parcel sales, there could be no
artificial splitting of transactions between one of 'service' and
one of 'sale' with the attempt to bring the same under the
purview of the former. The petitioners rely on letter bearing
No.DOF 334/3/2011-TRU dated 28.02.2011 which had,
according to them, clarified that service tax is not intended to
cover sale of food that is collected or picked up for
consumption elsewhere.
*****
26. Thus, not all services rendered by restaurants in the sale of food and drink are taxable and it is only certain specified situations that attract tax. The sale of food and drink simplicitor, services of selection and purchase of ingredients, preparation of ingredients for cooking and the actual preparation of the food and drink would not attract the levy of tax. Only those services commencing from the point where the food and drinks are collected for service at the table till the raising of the bill, are covered. This would encompass a gamut of services including arrangements for seating, décor, music and dance, both live and otherwise, the services of Maître D'Or, hostesses, liveried waiters and the use of fine crockery and cutlery, among others. The provision of the aforesaid niceties are critical to the determination as to whether the establishment in question would attract liability to service tax, and that too, only in an air-conditioned restaurant.
27. In the case of take-away or food parcels, the aforesaid attributes are conspicuous by their absence. In most restaurants, there is a separate counter for collection of the take-away food parcels. Orders are received either over telephone, by e-mail, online booking or through a food delivery service such as swiggy or zomato. Once processed and readied for delivery, the parcels are brought to a separate counter and are picked up either by the customer or a delivery service. More often than not, the take-away counters are positioned away from the main dining area that may or may not be air-conditioned. In any event, the consumption of the food and drink is not in the premises of the restaurant. In the aforesaid 6 Service Tax Appeal No.70405 of 2020 circumstances, I am of the categoric view that the provision of food and drink to be taken-away in parcels by restaurants tantamount to the sale of food and drink and does not attract service tax under the Act.
28. The petitioners have brought to my notice several orders passed by the Appellate Commissioners stationed in Chennai and any other parts of the State who have taken a view that take away services would not attract liability to Service tax. (Order in Appeal No.445 of 2018 dated 28.09.2018 passed by the Commissioner (Appeals), Chennai, Order in Appeal No.147 of 2019 dated 25.03.2019 passed by the Commissioner (Appeals), Coimbatore and Order in Appeal No.16 of 2020 dated 23.03.2020 passed by the Commissioner (Appeals), Coimbatore. In some cases, I am informed that appeals have not been filed by the Department and thus the prevailing view, even within the Department is that there would be no service tax liability on take away food."
In view of the aforesaid observations, the Tribunal concluded that no service tax can be levied on the activity of "Take Away of food items as it amounts to sale and does not involve any element of service, inter alia, observing as under:-
"19. It is seen that in case of take-away of food, the appellant sells the food/packaged items, as chosen by the customer, over the counter and this would amount to sale of goods. Services such as dining facility, washing area, clearing of the tables after the food has been eaten are, therefore, not involved. The activities of preparation of food and packing thereof by the appellant in case of take-away items are conditions of sale of such food, wherein the intention of the customer is to merely buy such packaged product from the appellant, and not to avail any restaurant services."
Since the facts of the present case are absolutely identical and give rise to the issue of taxability of sale of food items through "Take Away" or "Home Delivery", the activity is clearly of sale of food and does not involve any service element and, therefore, following the ratio of the judgements referred above, the activity of sale of food items by "Take Away" or "Home Delivery" by the appellant is not liable to service tax. Accordingly, the impugned order deserves to be set aside and the appeal is allowed.
7. We find that the facts of the present case are squarely covered by the abovementioned decisions. Accordingly, we do not find any reason to interfere with the impugned order and the 7 Service Tax Appeal No.70405 of 2020 same is sustained. The appeal filed by the Department is dismissed. Cross-objection filed by the Respondent-Assessee also gets disposed of.
(Operative part of the order pronounced in open court) Sd/-
(P. K. CHOUDHARY) MEMBER (JUDICIAL) Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) Nihal