ALFA LAVAL (I) LTD. EMPLOYEES CO-OP. CONSUMERS SOCIETY Vs. C.C.E.
LAWS(CE)-2015-5-26
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on May 28,2015

Alfa Laval (I) Ltd. Employees Co -Op. Consumers Society Appellant
VERSUS
C.C.E. Respondents




JUDGEMENT

M.V.RAVINDRAN,MEMBER (J) - (1.)THIS appeal is directed against Order -in -Appeal No. PI/RKS/149/2010, dated 23 -9 -2010. Relevant facts that arise for consideration are the appellant is Engaged in providing services of running a canteen in the factory premises of their client M/s. Alfa Laval (India) Ltd. The appellant is registered as Co -operative Society and are purchasing all the materials like food articles, grocery etc. required for making food and served the same to the employees of M/s. Alfa Laval (India) Ltd. Revenue authorities were of the view that the services rendered by the appellant would fall under the category of "Outdoor Catering Service" for the period 10 -9 -2004 to 31 -7 -2009. Appellant contested the show cause notice issued to them on merits as well as on limitation. The main ground of the appellant before the adjudicating authority was that they are a Co -operative Society of the employees and they are only preparing the food while all the items required for preparation of food, utensils, space, water and electricity are provided by their client M/s. Alfa Laval (India) Ltd. and also the invocation of extended period is incorrect. Adjudicating authority after following due process of law confirmed the demands raised with interest and also imposed penalties. The adjudicating authority appropriated the amount of tax liability and the interest paid by the appellant before the issuance of show cause notice. Aggrieved by such an order, an appeal was preferred. The first appellate authority after granting an opportunity of personal hearing, concurred with the views of the adjudicating authority and upheld the order -in -original by confirming the demand of Service Tax liability and interest thereof but set aside the penalties by invoking the provisions of Section 80 of the Finance Act, 1994.
Learned Counsel appearing on behalf of the appellant would take us through the records. He would submit that the agreement which has been entered by the appellant with M/s. Alfa Laval (India) Ltd., specifically talks about the responsibility of preparation of breakfast, lunch, dinner, snacks, tea, coffee and serving the same to the employees during the scheduled time, the premises, utensils, water and other utilities are provided free of cost by their client. It is his submission that the appellant herein is a co -operative society of the employees of Alfa Laval (India) Ltd., and were actually receiving the payment for the expenses incurred in procurement of materials and charges paid to its employees. It is his submission that the appellant is only preparing food and may not be covered under the definition of outdoor catering service. He would then take us through the definition of outdoor catering service and submit that they do not supply the food to the employees of the client. He would place reliance on the judgment of the Tribunal in the case of Rajeev Kumar Gupta v. CCE - : 2009 (16) S.T.R. 26 (Tri. -Del.) for the proposition that in that case a similar set of facts were there and all the utilities and facilities were provided by the appellant therein and the appellant therein only engaged himself in preparation and serving food at the Company premises. He would submit that the appellant had already discharged the Service Tax liability and has also paid interest.

(2.)LEARNED D.R. on the other hand would draw our attention to various clauses of the said agreement. He would submit that the activity undertaken would fall under the category of provisions of definition of "outdoor catering services". He would submit that the agreement itself indicates that the appellant is having expertise in the activity of catering service which is very evident from the preamble on the contract entered by the appellant. It is his submission that an identical issue came up before this Tribunal in the case of Indian Coffee Workers Co -op Society Ltd. v. CCE - : 2014 (33) S.T.R. 266 (Tri. - Del.). It is his submission that in that case it was held the services rendered by the appellant therein would be covered under the definition of "outdoor catering service".
(3.)WE have considered the submissions made at length by both the sides and perused the records.
The issue involved in the case is whether the appellant during the relevant period 10 -9 -2004 to 31 -7 -2009 would be covered under the Service Tax net under the category of outdoor catering service or otherwise. The undisputed facts are that -the appellant is a co -operative society, they have entered into an agreement with Alfa Laval (India) Ltd., for rendering the services of preparation of food and serving the same to the employees during the scheduled time, they have engaged the services of various individuals for doing the activity of preparation of food and serving the same to the employees of Alfa Laval (India) Ltd. On this factual background we have to' consider whether the activity as rendered by the appellant would fall under the definition of outdoor catering service as provided under Section 65(24), 65(105)(76a) and 65(105)(zzt) of the Finance Act, 1994. The said definition states that -

"Section 65(24) defines the term caterer as under:

"Caterer" means 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 of occasion;

Section 65(105) (76a) defines the term outdoor caterer as under:

"outdoor caterer" means 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 ser -, vices;

Section 65(105)(zzt) of the Act defines taxable service in relation to outdoor catering service as under:

"(zzt) to any person, by an outdoor caterer"

5.1 It could be seen from the above reproduced definition that a person who supplies directly or indirectly any food, edible preparations, alcoholic or non -alcoholic beverages or crockery and similar articles or accoutrements for any purpose of occasion, is a "caterer". In our view, the defence put forth by the learned Counsel in the appeal is misconceived for more than one reason.

5.2 Firstly, it is undisputed that the appellant is a separate entity in the eyes of law and engages various persons for preparation of food, though, in the premises of their client and also engages different personnel for serving the food. This would indicate that the appellant has not engaged himself in preparing food and serving the same to the employees of Alfa Laval (India) Ltd., though the employees of Alfa Laval (India) Ltd. are the members of the appellant co -operative society.

5.3 Secondly, on perusal of the agreement entered by the appellant with Alfa Laval (India) Ltd., we find that Alfa Laval (India) Ltd. had decided to engage specialized services in respect of catering services for their employees and appellant's credential was considered, having demonstrated their expertise in the said activity with their own trained personnel and having offered to undertake the activities relating to the catering service on contract basis, contract was awarded to appellant. On such clear -cut preamble to the contract entered by the appellant with Alfa Laval ((India)) Ltd., appellant cannot claim that they are not provider of the catering service.

5.4 Thirdly, the finding of the first appellate authority is relevant as recorded in Para 10.2 and is reproduced as under: - -

"I find that in this case the appellants are Employees' Cooperative Consumers' Society of employees of Alfa Laval (India) Ltd., Mumbai -Pune Road, Pune. The appellants have entered into an agreement dated 22 -10 -2008, with M/s. Alfa Laval (India) Ltd., for providing catering services. According to the clause 1, 2 and 3 of the said agreement, the appellants are Contractor and responsible for providing catering services for employees of the Company. As per the agreement, the appellants are responsible for preparation of breakfast, lunch, dinner, snacks, tea, coffee and serving the employees during the schedule time. The appellants are also entitled to receive payments for all the actual expenses incurred in the procurement of raw materials and towards wages paid to its employees. The terms of the contract at clause No. 17 of the agreement also provide for penalty on the appellants in case the appellants fail to fulfil their contractual obligations, on any day. I find that the appellants are receiving monthly subsidy from the company and they have also generated income by way of sale of coupons and canteen cards to the' workers of the company. Thus, I find that in this case the service is provided by the appellants on principal to principal basis and for that they have also received monetary considerations. Section 65(76a) of the Chapter V of Finance Act, 1994, defines Outdoor Caterers means a caterer engaged in providing services in connection with catering at a place other than his own but including a place provided by a tenancy or otherwise by a person receiving such services. Thus in view of the above provisions and the factual position laid down in the aforesaid contract between the appellants and the company, I find that the services given by the appellants to the aforesaid company are catering services and in this case the appellants are service providers and the company and its employees are the service receiver. Therefore, as per the provisions of Section 65(105)(zzt) of the Finance Act, 1994, the above service becomes taxable and the appellants are required to pay Service Tax on the aforesaid catering services provided by them to the company. I therefore reject the contention of the appellants that such services are by them to their own employees. It is also not correct that the appellants have provided only manpower to the company as such are not the terms of the contract. The appellants are under the contractual obligations to provide catering services to the aforesaid company. In view of the above I find that the adjudicating authority have rightly held that the appellants have provided catering services to the company and are required to pay service tax thereon along with interest."

5.5 The above said factual finding has not been disputed by the -.appellant in appeal. We also find strong force in the contentions raised by the learned D.R. that the said issue has been decided by the Principal Bench of this Tribunal in the case of Indian Coffee Workers Co -op Society Ltd. (supra). The ratio of the judgement in Para 6 reproduced below: - -

"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."

5.6 As regards the reliance placed by the learned Counsel in the case of Rajeev Kumar Gupta (supra) we find that the Tribunal in the case of Indian Coffee Workers Co -Op Society Ltd. (supra) has clearly distinguished the fact that in the case of Rajeev Kumar Gupta (supra) he himself was preparing the food and serving the same, while in the case of Indian Coffee Workers Co -Op. Society Ltd., the cooperative society was not engaged in preparing the food and serving the same but were employing people to do so; a fact which is very relevant in the case in hand as has been set out by us herein above.

In view of the foregoing, we do not find any reason to interfere with the impugned order. The first appellate authority has already set aside the penalties imposed on the appellant and the Revenue is not in appeal against such order. Accordingly, in the facts and circumstances of the case, the impugned order is upheld and the appeal is rejected.

(Pronounced in Court on 28 -5 -2015)

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