2024-VIL-212-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Respondent-assessee entered into contracts with various international and domestic airlines for supply of food, handling, transportation service etc - Demand of service tax on the supply of meals and other food items by the respondent to the airlines – assessee of the view that supply of meals would not be a ‘declared service’ and so far as the other services are concerned, they paid service tax on all the services provided to the airlines – Commissioner dropped the proceedings holding that the respondent had not provided any service in relation to supply of food – aggrieved by the order Revenue filed instant appeal – HELD – the definition of an ‘outdoor caterer’ required that the activity of catering should be carried out at a place other than that of the service provider. It is evident that in cases of flight caterers there can be no catering at an external location or the airline location for the reason that food is loaded in the aircraft at the airport and is not catered. The actual catering of the food takes places when the flight takes off and the food is catered to the passengers by the airline crew - Section 65B (44) of the Finance Act, 1994 defines ‘service’ to mean any activity carried out by a person for consideration, and includes a declared service, but shall not include, amongst others, an activity which constitutes merely such transfer, delivery or supply of any goods which would be deemed to be a sale within the meaning of clause (29A) of Art. 366 of the Constitution - the respondent supplies foods to the airlines, the food is loaded in the aircraft at the airport but the respondent does not provide any catering service, which in fact is provided by the airline crew. Such being the position, service tax would not be leviable on the supply of food items to the airlines – impugned order does not call for any interference – Revenue appeal is dismissed
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