The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the activity of sale of packed food which is sold as take away either on the counter of the restaurant or through delivery boys to the customer’s place does not attract service tax under the provisions of Finance Act, 1994.
The appellant, M/s Hotel Utsav have been discharging the service tax in respect of food served in the restaurant to their customers. The department observed that they are not paying service tax in respect of packed food which is sold as take away either on the counter of the restaurant or through delivery boys to the customer’s place and therefore, initiated proceedings.
A two-judge bench of the Tribunal comprising Mr. Ramesh Nair (JM) and Mr. Raju (AM) has found that the food is not served in the hotel whereas the same is sold in the packed form therefore, as per the nature of this activity, it is clearly a sale of food, no service is involved.”
Deleting the order of the department, the Tribunal held that “From the above judgement, it is observed that the fact of the above case is absolutely identical to the facts of the present case inasmuch as the food in packed form is sold either on the counter or through delivery boys to the customers’ place. Therefore, the activity is clearly of sale of food and no service is involved. In view of above judgment, the issue is no longer res-integra, accordingly, following the ratio of the above judgement we are of the view that the appellant’s activity of sale of food does not fall under the category of service. Hence the same is not liable for service tax. Accordingly, the impugned order is set aside.”
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