ST not leviable on sale of food by licensed vendor to passengers in train: CESTAT

Case Review: Commissioner of Service Tax, Delhi-II v. Foodworld - [2022] 135 taxmann.com 261 (New Delhi - CESTAT)

Judiciary and Counsel Details

• • Anil Choudhary, Judicial Member and P.V. Subba Rao, Technical Member
  • R.K. Majhi, AR for the Appellant. 
  • Puneet Aggarwal, Adv. for the Respondent.

Facts of the Case

The assessee was engaged in the business of sale of packed food and beverages on board the trains run by Indian Railways besides sale of packed food items/beverages at stalls at railway stations. In the instant case, the appeal was filed by Revenue against the order of Commissioner (Appeals) which held that there was no service tax on the activity of selling packed food and beverages to passengers, on board trains and stations by the assessee.

CESTAT Held

The Honorable CESTAT observed that the assessee was not appointed by the passengers and there was no obligation on the passengers to buy food. Moreover, in the facts of the present case, no machinery provision was also there for bifurcation of the transaction into service portion and sale portion, for levy of service tax. Thus, it was held that in the transaction between the assessee and the passenger who purchased the food was a simple sale transaction of food and there was no element of service involved in sale of food to passengers.

Case Review

• • Ltd., v. CCE, 2019 (368) E.L.T. 216 (SC) (para 16 and 17) relied on
    Indian Railways C & T Corpn. Ltd. v. Govt. of NCT of Delhi [2011] 9 taxmann.com 288/30 STT 479 (Delhi) (paras 9.4 and 14) followed.

List of Cases Referred to

• • Indian Railways C & T Corpn. Ltd. v. Govt. of NCT of Delhi [2011] 9 taxmann.com 288/30 STT 479 (Delhi) (para 1)
  • Sahakari Khand Udyog Mandal Ltd. v. CCE & C [2005] 1 STT 55 (SC) (para 6)
  • Bharat Sanchar Nigam Ltd. v. Union of India [2006] 3 STT 245 (SC) (para 7)
  • ITC Ltd., v. CCE, 2019 (368) ELT 216 (SC) (para 16).