COMMISSIONER OF SERVICE TAX Vs. THE GRAND ASHOK

JUDGEMENT

(1.) This appeal is filed by the revenue being aggrieved by the common order passed by the Tribunal against the very same Assessee holding that in an outdoor catering service the cost of goods supplied should be treated as sale of goods and it cannot be charged to service tax in view of the ratio of the Supreme Court in Bharat Sanchar Nigam Ltd. v. Union of India, 2006 3 STT 245.

(2.) The Assessee is engaged in the activity of providing catering service falling under out door caterer taxable under Section 65(76a) of the Finance Act, 1994. On scrutiny of the records by the Anti Evasion Wing of the Commissionerate, it was revealed that the Assessee had not made payment of service tax on the basis of the correct value of the taxable services. The service tax liability had to be paid on the basis of the gross amount collected from the clients after deducting the abatement as per Notification dated 10-9-2004 bearing No. 20/04-ST up to 28-2-2006 and Notification No. 1 /2006-ST, dated 1-3-2006. That the service tax was paid only on a part of the amount collected that is only on the handling and transportation charges which is in contravention of provisions of Section 67 of the Finance Act, 1994.

(3.) It appears that the Assessee received an amount of Rs. 11,34,69,387 from the Airlines, for In-flight catering from 10-9-2004 to 31-3-2006 and the value of the taxable service after abatement works out to Rs. 5,87,34,694 on which the service tax liability works out to Rs. 57,86,938. The Assessee however paid a sum of Rs. 4,96,456 only. Hence the balance of amount of Rs. 52,90,482 was sought to be recovered by them. Accordingly a show-cause notice was issued.