- (1.) This appeal by the assessee arises from an order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) dated 17 September 2013. Though several questions of law have been formulated, the following three would govern the controversy in the appeal: (1) Whether in view of the decision of the Hon'ble Supreme Court in the case of K. Damodarasamy Naidu & Bros. Vs. State of Tamil Nadu & Anr.,2000 117 STC 1, the activities of the appellant being covered under the main part of the definition of tax on sale or purchase of goods under Article 366 (29A) (f) of the Constitution and the appellant having, admittedly, paid VAT in respect of the supply of food including beverages in the canteen/restaurant to individual customers who paid the amount according to the menu card, no service tax can be levied since it comes within the definition of ''sale' under Article 366 (29A) (f) of the Constitution of India read with Section 2 (ac) (vi) of U.P. Value Added Tax Act; (2) Whether the appellant having charged the amount in cash directly from individual customers in respect of the food, eatables, drinks and beverages according to the rates mentioned in the menu card maintained in the canteen/restaurant run by it, hence it is neither providing any service to NTPC nor to LANCO but is only selling the goods in the restaurant to individual customers and is not liable for payment of any service tax as outdoor catering service under Section 65 (76a) read with Section 65 (24) of Finance Act, 1994; and (3) Whether the Tribunal has committed an error of law in confirming the imposition of penalty without considering the law laid down by the Apex Court in the case of Union of India Vs. Rajasthan Spinning & Weaving Mills, 2009 238 ELT 3 at page 12, and the decision of the Apex Court in the case of Commissioner of Income Tax Vs. Reliance Petro Products, 2010 322 ITR 158, in which it has been specifically held that the penalty under Section 11AC of the Central Excise Act (which is in pari materia to Section 78 of the Finance Act, 1994) can only be imposed after recording the finding of fraud, collusion or any willful misstatement or suppression of facts or contravention of any provisions of the Act with intent to evade payment of duty.
(2.) The assessee is a Society registered under the Societies Registration Act, and had entered into agreements with National Thermal Power Corporation Limited (NTPC) and Lanco Infratech Limited (LANCO). Pursuant to an award of contract of 20 June 2008, NTPC entered into an agreement with the assessee for running and maintenance of an administrative building canteen. The total value of the contract was Rs. 36,94,824/-, the period of completion being two years. Clause 4 of the letter of award, stipulates that the service tax applicable would be reimbursed extra at actuals against the submission of documentary evidence. The rates for eatables to be served in the canteen of the administrative building were prescribed in Annexure-II. The letter of award contained other incidental conditions. By another letter of 2 June 2008, NTPC awarded to the assessee the work of running and maintenance of a guest house. The contract value was Rs. 53,75,604/-. The contract stipulated that the rates of eatables to be served in the guest house would be as provided in Annexure-I. On 8 October 2009, LANCO awarded to the assessee a contract for running and maintenance of catering services for its Porta Huts Township at its Anpara site. The scope of the work included but was not limited to the running and maintenance of catering services. The monthly value of the contract was Rs.2.10 lacs. The letter of award stipulated that service tax would be paid extra in accordance with the prevailing rates on the submission of relevant documents. Commercial tax/VAT was required to be charged from customers and visitors. LANCO agreed to reimburse the amount of consumables and cleaning materials required for the use of Porta Huts to the contractor besides reimbursing the laundry charges. These agreements are annexed to the paper book in the appeal of the assessee and have formed the basis of the submission which has been urged in support of the appeal.
(3.) A notice to show cause was issued on 5 April 2011 by the office of the Commissioner of Central Excise, Allahabad requiring the assessee to show cause why service tax in the amount of Rs.10,40,803/- for the period 1 October 2009 to 30 September 2010 should not be imposed on the assessee by treating the activity of the assessee of running restaurants/canteens at the premises of NTPC and LANCO as "outdoor catering services" within the meaning of Section 65 (76a) of the Finance Act, 1994. The assessee submitted a reply to the notice to show cause. By an order dated 16 September 2011, the Joint Commissioner of Central Excise & Service Tax, Allahabad confirmed the demand of Rs. 10,40,803/- as service tax under Section 73 of the Finance Act, 1994 together with interest. A penalty of Rs. 10,000/- under Section 77 (1) (a) was imposed. Additionally, a penalty under Section 78 of the Finance Act, 1994 was imposed on the ground that the assessee had suppressed material facts from the department by not getting itself registered in due time, by not submitting ST-3 returns and by not paying the dues of service tax for the taxable services provided by the assessee. The Commissioner (Appeals) dismissed the appeal filed by the assessee on 23 April 2012. The CESTAT, by its order dated 29 August 2013, has confirmed the order by dismissing the appeal.;