The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that service tax exemption is available on food and beverages services by canteen maintained in factories.
The tribunal relied on the case of ICS Food Pvt. Limited vs. Commissioner of Service Tax, Noida in which it was held that the service tax exemption is applicable on the services provided in relation to serving of food or beverages by a canteen maintained in a factory, as required under the Factories Act, 1948 when food or beverages are prepared and served by a person other than employees of factory itself.
Facts
The appellant/assessee is a service provider and has claimed the service tax exemption on the services of food and beverages by a canteen maintained in a factory is available to the appellant.
As per exemption notification No. 25/2012-ST service tax shall be exempted on services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having (i) the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year, and (ii) a licence to serve alcoholic beverages.
From the plain reading of the above notification, it is nowhere indicated that which person will get the exemption. It is predominantly the service of Food and Beverages by a canteen is exempted irrespective of the fact that who is running the canteen. The only condition is that such canteen should be operated within the premises of the factory as per Factory’s Act, 1948 which is not in dispute. Therefore, the exemption of Notification No. 25/2012-ST is clearly admissible to the appellant. As it is the appellant who runs the canteen in the factory which is covered by Factories Act, 1994.
Issue Raised
Whether the benefit of Notification No. 25/2012-ST in respect of services of food and beverages by a canteen maintained in a factory is available to the appellant being a service provider or the same is not available to them on the ground that the exemption is available only to the owner of the premises where the canteen is operated.
Conclusion
The court allowed the appeal of the assessee and held that the appellant is clearly entitled for the exemption under Notification No. 25/2012-ST.
Case Details
Case Name: Matashree Hospitality Services V/S Commissioner of Central Excise & ST, Vadodara
Citation: SERVICE TAX Appeal No. 10691 of 2018
Court: CESTAT Ahmedabad
Judge: Ramesh Nair, Member (Judicial) and C.L. Mahar, Member (Technical)
Decision Date: 13/08/2024
