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CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI

PRINCIPAL BENCH, COURT NO. 4

SERVICE TAX APPEAL NO. 50701 OF 2020

[Arising out of Order-in-Original No.40/Pr.Commr./ST/BPL-IV/2019 dated 30.08.2019 passed by the Principal Commissioner CGST, Customs and Central Excise, Bhopal]

M/s. A S SALES CORPORATION Appellant Neelam Kunj, Asfabad, Itarsi (M.P.)-461111

Vs.

PRINCIPAL COMMISSIONER, CGST &

Respondent CENTRAL EXCISE, CUSTOMS-BHOPAL GST Bhawan, Arera Hills, Bhopal (M.P.)-462011

Appearance:

Present for the Appellant : Ms. J.Kainaat, Advocate Present for the Respondent: Shri S.K.Meena, Authorised Representative

CORAM:

HON’BLE DR. RACHNA GUPTA, MEMBER ( JUDICIAL )

HON’BLE MS. HEMAMBIKA R. PRIYA, MEMBER ( TECHNICAL )

Date of Hearing/Decision:23/03/2026

Final Order No.50694/2026

DR. RACHNA GUPTA

M/s. A.S. Sales Corporation, the appellant herein is engaged in

business of sale of packaged food, cooked articles and beverages at Railway platforms as well as in trains. The appellant is also registered with service tax department under the category of outdoor catering service, Restaurant service, legal consultancy service and various other taxable services. The department got an intelligence that the appellant was not discharging the tax liability properly. Thus, an inquiry was

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initiated and it was observed that the appellant had not paid service tax under reverse charge mechanism on the amount of licence fee paid by them to the Indian Railways for providing onboard mobile catering services in trains. The said activity is „Service‟ defined under section 65 (B)(44) Finance Act 1994. In light of the said observations and the various statements recorded during investigation, the appellant was served with a Show Cause Notice no. 92/2018 dated 25.04.2018 proposing the demand of service tax amounting to Rs.4,12,42,079/-, for the period from 2012-13 to 2016-17 , from the appellant along with the appropriate interest and the proportionate penalties under section 75, 76 and 78 of the Finance Act, 1994. The proposal was initially confirmed vide Order-in-Original no.40/2019 dated 30.08.2019 except that the penalty under section 76 of the Finance Act was not imposed. Being

aggrieved of the said order the appellant is before this Tribunal.

2. We have heard Ms. J. Kainaat, learned counsel for the appellant and Shri S.K.Meena learned authorised representative of the

Department.

3. Learned counsel for the appellant submitted that the license granted by the Indian Railways is only a permission given to the appellants to carry out catering business at the railway platforms. Such permission has wrongly been treated as provision of any service rendered by the appellants to the Railways. There, in fact, is no relationship of service provider and the service recipient between the Railways and the appellants. The activity does not qualify to be called as „Support Services‟. Once there is no service element, the question of

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liability even under reverse charge mechanism, does not at all arise. Learned counsel further submitted that the issue has already been decided by this Tribunal in favour of such assesses, in case of M/s. Express Food Services vs. Commissioner of CGST & Central

Excise, Bhopal reported as 2025 (5) TMI 66-CESTAT, Delhi

3.1 It is also submitted that the demand is partly time barred. With these submissions, the order under challenged is prayed to be set aside

and the appeal is prayed to be allowed.

4. Learned Departmental Representative has reiterated the findings arrived at by the Original adjudicating authority. However, the Departmental Representative has acknowledged the decision in M/s.

Express Food Services (supra)

5. Having heard both the parties and perusing the entire record and the decision referred by the appellant, it is observed that the issue

involved in the present appeal is:

whether appellant is liable to pay service tax under reverse charge

mechanism on the amount of license fee paid to Indian Railways, in lieu

of the per