The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on outdoor catering services on the grounds of limitation.
N Kumar Associates International, the appellant assessee was engaged in providing taxable service under the category of ‘outdoor catering’ service, defined under Section 65(76a) read with Section 65 (105) (zzt) of the Finance Act, 1994 and entered into the agreements with Indian Institute of Technology (IIT), Kanpur for providing the mess services.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the service tax demand of Rs.21,84,055/- along with interest and also imposition of penalties.
S.B.P Shinsha, the counsel for the assessee contended that the assessee were not liable to pay any service tax since the services provided by them were not covered under the scope and purview of the definition of taxable service.
Also submitted that the demand raised by the department was not as per the law and liable to be deleted.
Nivedita Shinha, the counsel for the department relied on the decisions made by the lower authorities and contended that the show cause proceedings are not barred by limitation of time and the payment of Value Added Tax (VAT) by considering the transaction as the sale would not absolve the assessee from payment of service tax on the provision of taxable output service.
The Bench observed that the issuance of show cause notice by the department was beyond the time limit and thus the demand raised against the assessee was not sustainable.
The two-member bench comprising Mohanty (Judicial) and Parthiban (Technical) held that the demand was barred by limitation of time and quashed the service tax demand.
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