NAANDI FOUNDATION Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE prayer in the application is to dispense with condition of pre -deposit of service tax of Rs. 6,65,837/ - which stands confirmed against the applicant/appellant for the period from October, 2007 to September, 2008 along with imposition of penalty of identical amount under Section 78 of Finance Act, 1994. In addition a penalty stands imposed under Sections 76 & 77 of the Finance Act, 1994. As per facts on records, the appellant is a trust and entered into a joint venture agreement with Government of Rajasthan in providing mid -day meal to school children studying in Government schools, government aided school and EGS centres etc. The food is cooked at Centralized Kitchen at Kishangarh. The wheat and rice is supplied by the Government. The entire cost of programme is shared between the appellant and the Government as per terms of MOU signed between the two. As per the appellant there is no consideration received by the appellant from the Government. The Revenue entertained a belief that the activity undertaken by the appellant amount to providing of outdoor caterer's service. The proceedings were initiated against them for confirming the demand of service tax. The said proceedings culminated into the impugned order passed by the original authority and upheld by the Commissioner (Appeals). Hence the present appeal along with stay petition.

(2.) Outdoor caterer's means a caterer engaged in providing services in connection with catering at a place other than his own, but include a place provided by way of tenancy or otherwise by the person receiving services.

(3.) AFTER going through the MOU entered into by appellant with Government of Rajasthan, we find that mid -day meal provided by the appellant, is being cooked at the centralized kitchen and is in the nature of joint venture programme between the appellant and the Government of Rajasthan. The appellant is under an obligation to supply monthly report about the food grains lifted from the FCI godown and utilization of food grain and is required to submit statement on number of school children under the programme as also to submit annual report along with audited statement of accounts. The clause of agreement also reveal that the appellant is an autonomous non profit making charitable trust for providing mid -day meal to school children and the government and appellant are working on principal to principal basis. Vide Notification No. ., dated 3 -9 -2010, the activities of providing mid -day meal by NGO have been held to be exempted from the taxable service on outdoor catering. Similarly vide ad -hoc exemption Notification No. 2/2/2011 issued from F. No. 137/94/2010 -CX.4 by Ministry of Finance, it has been held that mid -day meal provided by non government organization registered under any Central Act or State Act, under Centrally assisted Mid -Day Meal Scheme, from the whole of service tax leviable thereon under Section 66 of the Finance Act, during the period 10 -9 -2004 to 2 -9 -2010. In view of the above, prima facie, we allow stay petition unconditionally.