Absence of service provider-service receiver relationship - prize money not a taxable fee for services - eligibility for Cenvat credit - Cenvat credit admissible on computer generated invoice without signature - proprietor and proprietary concern treated as one for credit purposes - Cenvat credit admissible under group billing where other group member has not availed creditAbsence of service provider-service receiver relationship - prize money not a taxable fee for services - Demand of service tax on the amount received from Sethusamudram Corporation Ltd. was unsustainable and set aside. - HELD THAT: - The appellant participated in a design competition called by SCL and received Rs. 75,000 as an award selected by a Board of Assessors. The tribunal found that the transaction was a prize for winning the competition and that no contractual relationship of client and service provider existed between the appellant and SCL. As there was no provision of service by the appellant to SCL in the facts before the authority, the receipt did not attract service tax. [Paras 5]Demand of service tax relating to the amount received from SCL is set aside.Eligibility for Cenvat credit - Cenvat credit admissible on computer generated invoice without signature - proprietor and proprietary concern treated as one for credit purposes - Cenvat credit admissible under group billing where other group member has not availed credit - Denial of Cenvat credit on (a) computer generated Moster.Com invoice for mobile service, (b) insurance and repair invoices in the name of the proprietor, and (c) Airtel group bills was not justified and credit was allowed. - HELD THAT: - (a) The Moster.Com invoice was computer generated and explicitly stated that signature was not required; as the invoice contained all necessary particulars, Cenvat credit could not be denied merely for absence of signature. (b) The insurance and repair invoices were in the name of Ms. Varsha P. Jain, the proprietor, and records (Council of Architecture registration and ST 2) established that the proprietary concern and the proprietor are legally one; therefore credit cannot be denied on that ground. (c) Airtel bills were issued under a group scheme where bills bear names of multiple members; the appellant produced evidence that the other group member (M/s Creative Consultants) had not availed the credit, and on that basis the denial on the ground that another person might have availed credit was not sustained. For these reasons the impugned denials were reversed and credit allowed. [Paras 6]Cenvat credit on the Moster.Com invoice, on insurance/repairs in the proprietor's name, and on applicable Airtel bills is allowed.Final Conclusion: The appeal is allowed: the service tax demand on the prize money received from SCL is set aside, and the denials of Cenvat credit on the computer generated invoice, on invoices in the proprietor's name, and on Airtel group bills are reversed.

Taxability of commitment charges - commitment charges as interest - interest excluded from taxable value - interpretation of "interest" under the Income-tax Act - application of Rule 6(2) of Service Tax (Determination of Value) Rules, 2006 - distinction between guarantee commission and commitment chargesTaxability of commitment charges - commitment charges as interest - interest excluded from taxable value - application of Rule 6(2) of Service Tax (Determination of Value) Rules, 2006 - Whether service tax is payable on commitment charges collected in connection with providing corporate bank guarantees. - HELD THAT: - The appeal was confined to the question of taxability of commitment charges. The Tribunal examined the statutory definition of "interest" in Section 2(28A) of the Income-tax Act and the explanatory Circular of the CBDT, which treat commitment charges on unutilised portions of credit facilities as interest. The Madras High Court's observations in Vishwapriya Financial Services and Securities Ltd. that the statutory definition brings within "interest" charges payable in respect of unused credit facilities were noted, and the Department's SLP against that decision was dismissed by the Supreme Court. The Board's letter (para 19.2) and Rule 6(2) of the Service Tax (Determination of Value) Rules, 2006 (which excludes interest on loans from taxable value with effect from 19-4-2006) were held to be directly applicable. Applying these authorities and provisions, the commitment charges received by the appellant were characterised as being in the nature of interest and therefore excluded from the taxable value for service tax purposes. On that basis the impugned demands in respect of the specified periods were set aside.Impugned Orders-in-Original demanding service tax on commitment charges quashed and the appeal allowed.Final Conclusion: The appeal is allowed: commitment charges were held to be in the nature of interest and, in view of the Board's clarification and the exclusion under Rule 6(2) of the Service Tax (Determination of Value) Rules, 2006, are not liable to service tax for the periods adjudicated; the Orders-in-Original are set aside.

Construction of Complex service - exclusion for residential complex constructed for personal use - Commercial or Industrial Construction service - Works Contract service - appropriation of tax paid - penalties under Section 77 and Section 78 of the Finance Act, 1994Construction of Complex service - exclusion for residential complex constructed for personal use - Construction of residential apartments/quarters for Pondicherry University and Police Department is taxable under Construction of Complex service - HELD THAT: - The authority found that the apartments and quarters were constructed for Pondicherry University and the Police Department and were not sold but retained for use by those entities. The statutory definition of "Residential complex" contains an exclusion for complexes constructed for personal use by the person who engages others for design or construction. The legislative intent, as interpreted by the authority, is to tax residential complexes constructed and sold for consideration, and not those constructed for the owner's own use. Applying that exclusion, the demand under Construction of Complex service does not survive for the constructions undertaken for PU and the Police Department. The decision in O-I-A No. 127/2011 (P-ST), dated 17-6-2011 in M/s. Senthil Constructions was held to be persuasive and applicable to the facts of this case. [Paras 5]The constructions for Pondicherry University and the Police Department are not taxable under Construction of Complex service; the demand under that head is set aside.Commercial or Industrial Construction service - Works Contract service - appropriation of tax paid - Taxability of tower foundation construction for BSNL and effect of tax paid under Works Contract service - HELD THAT: - Records show the appellant constructed tower foundations for BSNL during Jan 2006 to June 2009. The Department originally sought to tax that activity as Commercial or Industrial Construction service for the earlier period. The appellant, however, had voluntarily classified the service as Works Contract service and paid service tax (with interest) w.e.f. 1-6-2007; the Lower Adjudicating Authority accepted and appropriated that payment for the period 1-6-2007 to 19-12-2009. Given that acceptance and appropriation, the demand raised by the authority for the identical activity for the period from Jan 2006 to 31-5-2007 under Commercial or Industrial Construction service was held unsustainable. The authority therefore declined to sustain the earlier demand to the extent covered by the later accepted payment under Works Contract service. [Paras 5]The demand for the BSNL works as Commercial or Industrial Construction service for the period up to 31-5-2007 is not sustainable; tax paid and appropriated under Works Contract service from 1-6-2007 is accepted.Traversing beyond the Show Cause Notice - appropriation of tax paid - Whether the Lower Adjudicating Authority traversed beyond the scope of the Show Cause Notice by confirming taxability under Works Contract service - HELD THAT: - The appellant contended that the Lower Adjudicating Authority exceeded the SCN by confirming a demand under Works Contract service. The record shows the appellant had voluntarily classified and paid tax under Works Contract service for BSNL works from 1-6-2007 and the authority accepted and appropriated that payment. Because the appellant itself had treated and discharged the tax liability under Works Contract service for the relevant period, the authority's acceptance did not amount to travelling beyond the SCN. Consequently, the contention of excess beyond the SCN was rejected. [Paras 5]The Lower Adjudicating Authority did not traverse beyond the scope of the Show Cause Notice; acceptance and appropriation of tax paid under Works Contract service is valid.Penalties under Section 77 and Section 78 of the Finance Act, 1994 - Sustainability of penalties imposed under Sections 77 and 78 of the Finance Act, 1994 - HELD THAT: - Since the demands under Construction of Complex service and Commercial or Industrial Construction service (prior to 1-6-2007) were held not to survive, and the appellant had already paid the surviving demand with interest before issuance of the show cause notice, the authority found no justification for maintaining the penalties. On that basis, penalties under Section 77 and Section 78 were set aside. [Paras 6]Penalties imposed under Sections 77 and 78 are set aside.Final Conclusion: The appeal is allowed in part: demands under Construction of Complex for constructions retained for use by Pondicherry University and the Police Department are set aside; the demand for BSNL works as Commercial or Industrial Construction prior to 1-6-2007 is unsustainable where tax was later paid and appropriated under Works Contract service from 1-6-2007; the Lower Authority did not exceed the SCN; penalties under Sections 77 and 78 are annulled. Consequential relief follows.

Proportionate reversal under Rule 6(3A) of Cenvat Credit Rules, 2004 - Cenvat credit attributable to exempted goods and exempted services - common inputs and common input services - exclusion of Rule 6(6) clearances from computation of attributable credit - procedural character of reversal provisionsCenvat credit attributable to exempted goods and exempted services - common inputs and common input services - procedural character of reversal provisions - Whether the computation of Cenvat credit to be reversed under Rule 6(3A) must include the entire Cenvat credit (including credits on inputs/input services used exclusively for dutiable goods/taxable services) or only the credit attributable to common inputs and common input services. - HELD THAT: - The Court held that Rule 6 and Rule 6(3)/(3A) operate to identify and neutralise credit attributable to inputs and input services used in or in relation to exempted goods/services. A combined reading of sub-rules (1) and (2) shows the provision targets common inputs and input services used for both dutiable and exempted outputs. Credits on inputs or input services exclusively used for dutiable goods or taxable services are not within the ambit of Rule 6 and remain available under Rule 3; the procedural mechanism in Rule 6(3A) cannot curtail the substantive right to such credit. Reliance on Board circulars and precedents supports that the reversal mechanism applies only to common inputs/input services and not to credits exclusively utilised for dutiable outputs. Consequently the Lower Adjudicating Authority's approach of treating "total Cenvat credit taken" as including exclusively-used credits was incorrect.Only Cenvat credit attributable to common inputs and common input services used in both dutiable and exempted outputs is liable to proportionate reversal under Rule 6(3A); credits exclusively used for dutiable goods/taxable services are not to be included in the reversal computation.Exclusion of Rule 6(6) clearances from computation of attributable credit - proportionate reversal under Rule 6(3A) of Cenvat Credit Rules, 2004 - Whether clearances covered by Rule 6(6) (e.g., exports, SEZ supplies, CT-3/CT-2) must be excluded from the numerator and denominator when computing attributable Cenvat credit under Rule 6(3A)(c). - HELD THAT: - The Court examined Rule 6(6) which exempts specified goods from the operation of sub-rules (1) to (4) of Rule 6. Applying that provision to the computation under Rule 6(3A)(c), the Court concluded that values of clearances specified in Rule 6(6) are not to be counted at all for the purpose of determining the attributable Cenvat credit. Therefore such clearances must be excluded from both the numerator (value of exempted goods/services) and the denominator (total value of taxable and exempted goods/services) in the formulae of Rule 6(3A). The appellant's exclusion of Rule 6(6) clearances from the denominator was consistent with this interpretation; the impugned order's partial exclusion was held to be incorrect to the extent it treated those clearances inconsistently.Values of clearances covered by Rule 6(6) are to be excluded both from the numerator and the denominator in the Rule 6(3A)(c) computation; they must not be taken into account for attributable credit determination.Proportionate reversal under Rule 6(3A) of Cenvat Credit Rules, 2004 - Whether any further reversal is payable in respect of electricity wheeled out to TNEB for the period April 2008 to March 2009. - HELD THAT: - The appellant produced evidence that the excise duty attributable to fuels (RFO and Naphtha) used for electricity supplied to TNEB had been paid monthly and that amounts representing inputs and input services used in the electricity wheeled out for the relevant period had been reversed in their Cenvat account and reflected in ER-1 returns. On this factual basis the Court found no requirement for additional reversal.No further reversal is payable in respect of the electricity wheeled out to TNEB for the stated period as the relevant reversal has already been made and recorded.Final Conclusion: The appeal is allowed and the impugned order is set aside. The proper approach is to compute reversal under Rule 6(3A) only with reference to Cenvat credit attributable to common inputs and common input services, excluding any credits exclusively used for dutiable goods/taxable services, and to exclude clearances covered by Rule 6(6) from both numerator and denominator; no further reversal is required for the electricity wheeled out to TNEB for 2008-09.

Business Auxiliary Service - Advertising Agency Services - space selling - service tax leviability - retainer fee versus commission - Board circular interpretationBusiness Auxiliary Service - Advertising Agency Services - space selling - retainer fee versus commission - Board circular interpretation - Whether canvassing for advertisements by the appellant during 1-7-2003 to 31-3-2005 was taxable as Business Auxiliary Service. - HELD THAT: - The Department treated the appellant's canvassing for advertisements as "promotion or marketing of advertisement services" and sought service tax under the category Business Auxiliary Service, relying on a later Board clarification that canvassing for advertisements on commission is taxable. The appellant produced the agreements showing it received a fixed monthly retainer rather than commission and that its activity was limited to bringing advertisement orders (space selling). Board Circular No. 64/13/2003-S.T., dated 28-10-2003 distinguishes between mere space selling (contacting advertisers and procuring orders) which is not an Advertising Agency Service, and canvassing that includes receiving text, estimating space, negotiating price or forming layout which would be taxable. The later Circular relied upon by the Department addressed canvassing on commission; where canvassing is limited to space selling and payment is by fixed retainer, the service falls outside the advertising agency levy. Further, the specific levy on "sale of space or time for Advertisement Services" was introduced only w.e.f. 1-5-2006 and therefore does not apply to the disputed period. Applying these principles to the agreements and facts, the adjudicating authority correctly found the appellant's activity to be limited to non taxable space selling and that receipt of fixed retainer fees did not convert the service into a taxable Business Auxiliary Service for the period in question.The appellant's canvassing for advertisements during 1-7-2003 to 31-3-2005 is not taxable as Business Auxiliary Service; the impugned demand is set aside.Final Conclusion: The appeal is allowed: service tax demand for canvassing/space selling charges received as fixed retainer during 1-7-2003 to 31-3-2005 is quashed, and the impugned Order in Original is set aside.

Proviso to extended period of limitation for suppression of facts - time-barred demand / limitation - export of services exemption - exemption for sale of space for advertisement in print media - classification of services - event management vis-a -vis business exhibitionProviso to extended period of limitation for suppression of facts - time-barred demand / limitation - Whether the demand raised for the period 2003-04 to 2007-08 is barred by limitation because the proviso to the extended period was invoked on alleged non-disclosure. - HELD THAT: - The show cause notice invoked the proviso to the extended period on the sole ground that the appellant had not disclosed the disputed activities in ST-3 returns or otherwise. The appellant produced an acknowledged letter dated 23-9-2004 informing the Department of its activities and there is no allegation that the appellant failed to obtain registration or file ST-3 returns. Consequently there is no suppression of facts with intent to evade tax and the proviso cannot be invoked. As a result the major part of the period demanded is time-barred and only the period within one year prior to issuance of the SCN survives. Since the surviving demand is limited, associated interest and penalties do not arise for the periods held to be barred. [Paras 5, 6]Major part of the demand is time-barred; proviso to extended period cannot be invoked in absence of suppression; only the period within one year of the SCN survives.Export of services exemption - Whether services rendered by the appellant in relation to an exhibition conducted in Sri Lanka are taxable or constitute export of services exempt from service tax. - HELD THAT: - Documents on record including a letter from the High Commission of India, Colombo, an NOC from the Indian Trade Promotion Organization and the VAT invoice from the venue in Colombo establish that the exhibition in question was conducted in Sri Lanka and that export of services took place. On this basis the services rendered for conducting the events in Sri Lanka are held to be exports of services and are not liable to service tax for the disputed period. [Paras 5, 6]Services for the Sri Lanka exhibition are exports of services and not taxable; no service tax liability for those events.Exemption for sale of space for advertisement in print media - Whether charges collected for sale of space for advertisements in print media are taxable or exempt from service tax. - HELD THAT: - The appellant's claim that sale of space/time for advertisement in print media is exempt was accepted. The adjudicating authority found that the charges collected towards sale of space for advertisements in the print media fall within the exempted category and therefore do not attract service tax for the disputed period. [Paras 6]Charges for sale of space for advertisements in print media are exempt and not liable to service tax.Final Conclusion: The appeal is allowed; the impugned Order-in-Original is set aside. The bulk of the demand for 2003-04 to 2007-08 is time-barred (only the period within one year of the SCN survives), and no service tax is leviable on sale of space for print media or on services relating to the Sri Lanka exhibition; consequential interest and penalties do not survive.

Service tax liability on handling and transportation charges - reimbursement v. consideration - scope of show cause notice - classification of services: Erection, Commissioning and Installation v. Consulting Engineer's service - extended period/time-bar and intention to evadeService tax liability on handling and transportation charges - reimbursement v. consideration - Whether the amounts received from BSNL as material handling and transportation charges constitute taxable consideration for services rendered and are liable to service tax. - HELD THAT: - The appellant paid service tax on consulting engineer's services for supervision, management and execution of cable laying works but did not tax separate amounts received as material handling and transportation charges. The Tribunal accepted the appellant's contention that these amounts were paid by BSNL specifically for loading materials from BSNL's stock yard and delivery to the work sites and were not part of the consulting engineering services rendered. The adjudicating authority's own classification of the appellant's main receipts as consulting engineer's service supports that handling and transportation were not integral to that taxable service. On the facts and contractual allocation, the handling charges lacked the requisite nexus to the taxable service and therefore could not be treated as consideration for taxable service. [Paras 5]The material handling and transportation charges received from BSNL are not taxable consideration for the services rendered and are not liable to service tax.Scope of show cause notice - classification of services: Erection, Commissioning and Installation v. Consulting Engineer's service - Whether the lower adjudicating authority could re-classify the appellant's receipts under Erection, Commissioning and Installation services when the show cause notice did not agitate such classification. - HELD THAT: - The adjudicating authority in the order-in-original classified the appellant's activities under Erection, Commissioning and Installation services. The Tribunal found this to be beyond the scope of the SCN because the SCN only alleged non-disclosure of handling charges and did not propose reclassification of the taxable services. The LAA did not discuss why the handling charges could not be considered as alleged in the SCN and thus traversed beyond the matters set out in the notice. Where an adjudicating authority goes beyond the scope of the SCN without proper notice and consideration, that part of the order is unsustainable. [Paras 5]The LAA's classification of the appellant's receipts under Erection, Commissioning and Installation services is unsustainable as it was beyond the scope of the SCN.Extended period/time-bar and intention to evade - Whether the demand could be sustained by invoking the extended period on the ground of suppression with intent to evade service tax. - HELD THAT: - The SCN dated 26-9-2008 invoked the extended period for the years 2003-04 to 2006-07, alleging non-disclosure of receipts in ST-3 returns. The Tribunal accepted the appellant's plea that their omission was based on a bona fide belief-an issue of statutory interpretation-that such receipts were reimbursements and not taxable. Citing the principle that invocation of extended period requires something more than mere failure to pay-namely positive concealment or deliberate withholding with knowledge of liability-the Tribunal held that there was no evidence that the appellant, a government undertaking, was aware of taxability and deliberately evaded tax. Accordingly, the extended period could not be invoked and the demand was time-barred. [Paras 5, 6]Invocation of the extended period is not maintainable; the show cause notice is time-barred and the demand cannot be sustained.Final Conclusion: The appeal is allowed. The demand of service tax on material handling and transportation charges is not sustainable on merits; the lower authority's reclassification is beyond the SCN; and the extended period cannot be invoked, rendering the show cause notice time barred. The impugned order-in-original is set aside.

Supply of tangible goods service - Mining service - Classification of taxable service - Unjust enrichment - Limitation for refund under Section 11BSupply of tangible goods service - Mining service - Classification of taxable service - Whether supply of floating rigs is taxable as "Mining service" or as "Supply of tangible goods service" for the disputed period. - HELD THAT: - The definitions of the two taxable service categories were analysed. "Mining service" is confined to services in relation to the process of extracting mineral, oil or gas from beneath the earth and infrastructure integral to extraction. The floating rigs in question were found to be used for post-extraction processing (purifying) and not for the actual extraction/drilling of oil. The supply involved making machinery/equipment available for use without transferring possession and effective control, which falls within the specific description of "Supply of tangible goods service." The decision in Indian National Shipowners' Association v. Union of India (affirmed by the Supreme Court) and expert technical opinion confirming the rigs' incapacity for drilling were relied upon. Applying the rule that a more specific sub-clause governs classification, the supply of floating rigs was held to be classifiable under "Supply of tangible goods service" and not under "Mining service." [Paras 5, 7]Supply of floating rigs is not covered under "Mining service" but is covered under "Supply of tangible goods service" and is taxable only with effect from 16-5-2008.Limitation for refund under Section 11B - Whether the refund claim is barred by limitation under Section 11B. - HELD THAT: - The authorities and precedents were examined for the proposition that the limitation under Section 11B applies only to tax collected lawfully under the statute. Where tax is collected without authority of law, the limitation period under Section 11B does not apply and refund can be claimed. Applying this principle to the facts-tax having been collected under an incorrect classification-the appellant's refund claim was held not to be time-barred. [Paras 6]Time limitation under Section 11B does not bar the appellant's refund claim in respect of service tax collected without authority of law.Unjust enrichment - Whether the defence of unjust enrichment prevents grant of refund to the appellant. - HELD THAT: - The appellant produced a certificate from CPCL confirming that no service tax was invoiced by the appellant or paid by CPCL on the sale of crude oil, and relied on the market-based fixation of crude prices beyond the appellant's control. On this evidence, the adjudicator accepted that the appellant had not passed on the incidence of the tax to any other person and that unjust enrichment did not apply. [Paras 6]Unjust enrichment is not applicable and does not preclude sanction of the refund.Final Conclusion: The appeal is allowed: the supply of floating rigs by the service provider is classifiable as "Supply of tangible goods service" (taxable from 16-5-2008), the refund claim is not time-barred because the tax was collected without authority of law, unjust enrichment is not attracted on the facts, and the matter is remitted to the lower authority to sanction the refund due in accordance with law.

Suppression of facts - proviso to extended period of time - inclusion of TDS in taxable value - gross amount charged - reverse charge mechanism - service tax valuationSuppression of facts - proviso to extended period of time - Invocation of the proviso to extend the period of limitation on the ground of suppression of facts by the appellant. - HELD THAT: - The adjudicating records show that the appellant paid service tax on royalty payments and also discharged the Income Tax liability by way of TDS to the Government of India as statutorily mandated. The appellant had not concealed the payments to the foreign service provider and there was no intention to evade tax; service tax on the royalties had been paid. On these facts the Tribunal found that there was no suppression of facts warranting invocation of the proviso to extend the period of limitation. Consequently the extended period could not be invoked and the department's demand is time barred except insofar as it falls within one year prior to the issue of the show cause notice. [Paras 5]Proviso to extend limitation is not attracted; period of demand survives only for one year prior to the show cause notice.Inclusion of TDS in taxable value - gross amount charged - reverse charge mechanism - service tax valuation - Whether the TDS/Income Tax amount paid by the appellant is includable in the value of the taxable service for computation of service tax. - HELD THAT: - The appellant, as service receiver under the reverse charge mechanism, had paid service tax on the gross invoice amount payable to the foreign service provider. The Income Tax/TDS amount was paid directly to the Government of India and was not part of the consideration retained or received by the foreign service provider. Consistent with decisions of higher forums referenced in the adjudication, service tax is leviable on the gross amount billed to the service receiver and not on an additional sum representing TDS paid to the tax authorities. The department did not dispute that service tax had been paid on the billed amount. Given that the TDS was not out of the consideration actually received by the service provider, it cannot be included in the taxable value. [Paras 5]TDS/Income Tax amount paid to the Government is not includable in the gross value for calculation of service tax; no further service tax is payable.Final Conclusion: Impugned order set aside; appeal allowed - demand under the extended period disallowed except as to the one year prior to the SCN, and no additional service tax payable on account of TDS paid to the Government.

Cargo Handling Service - mere transportation of goods (exclusion) - suppression and extended period of limitation - knowledge of Department / Centralised registration and its effect on suppression - classification of transshipment of household articlesSuppression and extended period of limitation - knowledge of Department / Centralised registration and its effect on suppression - Whether the demand is time-barred and whether the proviso to the extended period of limitation is invokable on account of suppression by the appellant - HELD THAT: - The appellant had obtained Centralised Registration on 20-7-2008 after applying on 8-6-2007 and had been discharging service tax under various heads and filing periodical returns. The Department issued the Show Cause Notice on 26-9-2008 proposing demand for the period 1-4-2003 to 31-3-2008. The Tribunal finds that because the appellant had applied for and was granted Centralised Registration and the Department was therefore aware of the appellant's activities, there was no suppression with intent to evade payment of service tax. Consequently, the proviso to the extended period of limitation (which applies where there is suppression) cannot be invoked. The period of demand therefore survives only from 1-4-2007. [Paras 5]No suppression established; extended period proviso not invokable; period of demand survives only from 1-4-2007.Cargo Handling Service - mere transportation of goods (exclusion) - classification of transshipment of household articles - Whether the appellant's activity of transshipment of household articles is classifiable as Cargo Handling Service - HELD THAT: - The Court compared the definition of 'Cargo Handling Service' prior to and after 16-5-2008 and observed that the concept contemplates handling of cargo/goods in bulk or commercial quantity, including loading, unloading, packing or unpacking of cargo and related terminal services, while excluding handling of export cargo or passenger baggage or mere transportation of goods. The activity in question-transshipment of household articles-comprises various used items of personal households and does not amount to bulk cargo or commercial goods. Therefore such activity cannot be equated with cargo handling under the statutory definition, and falls within the exclusion for mere transportation. [Paras 5, 6]Transshipment of household articles is not cargo handling service; the demand for service tax, interest and penalties based on that classification is unsustainable.Final Conclusion: Appeal allowed; impugned Order-in-Original set aside as the appellant's transshipment of household articles does not constitute 'Cargo Handling Service' and no suppression was established to invoke extended limitation, accordingly the confirmation of service tax, interest and penalty is unsustainable.

Business Auxiliary Service - service provider-service recipient relationship - incentives/loyalty rewards not connected to services rendered and not taxable - proviso to extended period for suppression with intent - limitation - demand survives only from 1-10-2007 - absence of corroborative evidence to establish taxable transaction - consequence - no interest or penalty where demand invalidProviso to extended period for suppression with intent - limitation - demand survives only from 1-10-2007 - absence of corroborative evidence to establish taxable transaction - Whether the demand for service tax for the period 2003-04 to 2007-08 is barred by limitation or saved by the proviso to the extended period. - HELD THAT: - The appellant had disclosed receipt of incentives in their books and in the Annual Report, which was publicly available and known to the Department. There was a bona fide belief that the incentives were not liable to service tax and the Department did not demonstrate suppression of facts with intent to evade tax. Consequently the proviso to invoke the extended period could not be applied. The Tribunal found that the major part of the demand period was time barred and that the demand survives only from 1-10-2007. [Paras 5]The extended period proviso cannot be invoked; the demand is time barred except from 1-10-2007.Business Auxiliary Service - service provider-service recipient relationship - incentives/loyalty rewards not connected to services rendered and not taxable - absence of corroborative evidence to establish taxable transaction - Whether the incentives received from the CRS developer (Amadeus) are taxable as Business Auxiliary Service. - HELD THAT: - The Department alleged that by continued usage and promotion of the CRS the appellant provided a service to the CRS developer, attracting tax as Business Auxiliary Service. The record however contained no material establishing a provider recipient service relationship or that the incentives were for a service rendered to Amadeus. The incentives were paid as loyalty/target rewards for patronage of the software and were not connected to the service provided by the appellant to their clients nor billed to clients. Reliance on the Tribunal decision in Kerala Publicity Bureau v. CCE supported the conclusion that such target incentives are not taxable. In absence of corroborative evidence, the demand on merits was held invalid, and consequential interest and penalty were not leviable. [Paras 5]The incentives paid by Amadeus are not taxable as Business Auxiliary Service; demand, interest and penalty are set aside.Final Conclusion: The appeal is allowed: the demand is time barred except from 1-10-2007, and on merits the incentives received by the appellant from the CRS developer are not taxable as Business Auxiliary Service; consequential interest and penalty are vacated and the impugned order is set aside.

Business Auxiliary Service - commission agent service - secondary service providers not taxable - limitation / extended period (suppression of facts) - Custom House Agent serviceLimitation / extended period (suppression of facts) - Whether the demand for service tax on commissions for the period 2004-05 to 2007-08 is time-barred. - HELD THAT: - The appellant had been regularly filing returns and paying service tax on its declared CHA and GTA activities, and therefore suppression of facts was not established. The show cause notice was issued on 15-12-2008. Applying the limitation analysis as recorded, the demand for the period 2004-2005 to 30-11-2007 is barred by limitation and cannot be sustained; only the demand relating to the period from 1-12-2007 survives. [Paras 5]Demand for the period 2004-2005 to 30-11-2007 is time-barred; only demand from 1-12-2007 survives.Business Auxiliary Service - commission agent service - secondary service providers not taxable - Custom House Agent service - Whether the 2% commission/incentive received from shipping liners/freight forwarders is taxable as Business Auxiliary Service (commission agent service). - HELD THAT: - On merits the Tribunal's reasoning in Lee & Muir Head (reproduced in the order) and the Board guidance and exemption for commission agents indicate that secondary services of booking export cargo, where the appellant's primary service is CHA and the booking is incidental/secondary, do not attract taxation under Business Auxiliary Service. The appellant's role in engaging liners to facilitate its CHA output service characterises the 2% receipts as secondary/commission receipts not taxable under BAS. Additionally, the show cause notice was vague and the order-in-original travelled beyond the SCN by specifically invoking Section 65(19)(ii) and classifying the receipts as commission agent service; that procedural defect renders the impugned order unsustainable. [Paras 5]The appellant is not liable to pay service tax on the 2% commission/incentive received from shipping liners/freight forwarders; the impugned order is set aside on this ground and for travelling beyond the SCN.Final Conclusion: The appeal is allowed: the demand is time-barred except insofar as it relates to period from 1-12-2007, and on merits the 2% commission receipts are not exigible to service tax as Business Auxiliary Service/commission agent service; the impugned order is set aside.

Taxability of maintenance or repair of computer software - preclusive effect of executive circulars vis-a -vis statutory provisions - extended period of limitation under Section 73(1) of the Finance Act, 1994 - eligibility of Cenvat credit for input services (telephone and employee mediclaim)Taxability of maintenance or repair of computer software - preclusive effect of executive circulars vis-a -vis statutory provisions - Appellant not liable to pay Service tax on maintenance of software for the disputed period prior to 1-6-2007. - HELD THAT: - The Department contended that maintenance charges collected by the appellant were taxable w.e.f. 9-7-2004 following rescission of Notification No.20/2003 and Board clarifications. Having considered the Board circulars and the decisions cited by the appellant, the authority held that Service tax cannot be levied by issuing a circular in the absence of enabling provisions in the Finance Act. Relying on the Madras High Court holding that the impugned circular had no application insofar as it sought to impose Service tax on software maintenance before the relevant statutory amendment, the demand for the period 9-7-2004 to 30-8-2005 (and generally prior to 1-6-2007) was held unsustainable. Consequently, the charge of Service tax on maintenance of software for the disputed period was set aside. [Paras 5]Demand for Service tax on maintenance of software prior to 1-6-2007 is not sustainable and is set aside.Eligibility of Cenvat credit for input services (telephone and employee mediclaim) - Appellant entitled to Cenvat credit on Service tax paid towards telephone and employee medical insurance. - HELD THAT: - On the question whether the disputed services constituted input services eligible for credit, the authority followed the settled principle (as applied in the cited High Court decision) that services availed in the course and for the purposes of business are eligible for input tax credit. The appellant had utilized the telephone and medical insurance services in relation to and in the course of its business; accordingly the Cenvat credit availed on those services was held to be admissible. [Paras 5]Cenvat credit on telephone and employee mediclaim is admissible and the appellant is entitled to such credit.Extended period of limitation under Section 73(1) of the Finance Act, 1994 - Extended period under Section 73(1) cannot be invoked; demand is not sustainable on limitation grounds. - HELD THAT: - The appellant asserted absence of suppression and reliance on bona fide belief regarding non-taxability, having commenced voluntary payment of Service tax w.e.f. 1-9-2005. The authority accepted that there was no suppression with intent to evade tax and that the ingredients for invoking the extended period under Section 73(1) were not present. In view of this finding, the extended period for making the demand was held inapplicable and the demand (including that for wrong availment of ineligible credit) was held to be unsustainable on limitation grounds. [Paras 5]Extended period under Section 73(1) not attracted; the demand is barred and unsustainable on limitation grounds.Final Conclusion: The appeal is allowed: the demand for Service tax on maintenance of software for the disputed period (and related demands) is set aside; the appellant is entitled to the Cenvat credit on telephone and employee mediclaim; and the extended period under Section 73(1) is not attracted, rendering the demand unsustainable.

Refund of service tax on foreign commission where drawback claimed - classification of foreign sales commission as input service or export-linked service - effect of omission of non-availment condition by amended notification on refund eligibility - treatment of All Industry Rate / drawback computation with respect to service tax on foreign commission - applicability of prescribed percentage of FOB value as cap on refundClassification of foreign sales commission as input service or export-linked service - treatment of All Industry Rate / drawback computation with respect to service tax on foreign commission - Whether service tax paid on foreign commission agents is an input service preventing refund under Notification No. 41/2007-S.T. when drawback was claimed - HELD THAT: - The Tribunal found, relying on the Director (Drawback)'s clarification, that the service tax on foreign agency commission was not factored into the computation of All Industry Rate of drawback and that such commissions are services linked to exports rather than input services. Consequently, the lower authority's conclusion that appellants had enjoyed double benefit by availing drawback of service tax was held to be unsustainable. The amended Notification No. 33/2008, which omitted the condition disallowing refund where drawback of service tax had been availed, further supports that such services are not to be treated as input services for the purpose of denying refund. On these bases the claims for refund in respect of exports made under Drawback shipping bills were held allowable. [Paras 5]Refund claims in respect of Service tax paid on foreign commission for exports under Drawback shipping bills are allowable; foreign commission is not to be treated as an input service for denying refund.Effect of omission of non-availment condition by amended notification on refund eligibility - refund of service tax on foreign commission where drawback claimed - Whether omission of the clause barring refund when drawback of service tax was availed (by Notification No. 33/2008) affects appellants' entitlement to refund - HELD THAT: - The appellate authority noted that Notification No. 41/2007 originally conditioned refund on non-availment of drawback of service tax under the Drawback Rules, but that clause (e) was omitted by Notification No. 33/2008. In light of that amendment and the Director (Drawback)'s statement that service tax on foreign commission was not included in drawback computation, the prior rationale for rejecting refund (i.e., availing drawback of the same service tax) no longer applies. Therefore appellants who filed claims after the amendment are entitled to benefit under the amended notification. [Paras 5]Omission of the non-availment clause by Notification No. 33/2008 removes the bar to refund where drawback of service tax had been alleged; appellants filing after the amendment are entitled to refund accordingly.Applicability of prescribed percentage of FOB value as cap on refund - refund of service tax on foreign commission where drawback claimed - Whether the refund should be restricted to 2% of FOB value or increased to 10% of FOB value - HELD THAT: - The authority observed that the earlier restriction applied a 2% of FOB cap, whereas Notification No. 33/2008 raised the cap to 10% of FOB. The Tribunal applied the temporal operation of the amendment: where refund claims were filed before the date of amendment, the 2% cap imposed by the lower authority requires no interference; for claims filed after the amendment, the appellants are entitled to refund calculated at 10% of FOB. [Paras 5]Claims filed before the amendment remain subject to the 2% FOB cap; claims filed after the amendment are entitled to refund computed at 10% of FOB value.Refund of service tax on foreign commission where drawback claimed - Disposal of impugned orders in light of findings on entitlement and applicable caps - HELD THAT: - Having held that service tax on foreign commission was not factored into drawback and that the amended notification removed the disqualifying condition, the appellate authority set aside the impugned orders to the extent they denied refund on exports under Drawback shipping bills. The orders restricting refunds contrary to the temporal application of the amended FOB caps were varied as indicated. [Paras 6, 7]Impugned orders are set aside to the extent they denied or incorrectly restricted refunds; appellants are granted refunds as determined above.Final Conclusion: The appeals are allowed in part: appellants are eligible for refund of Service tax paid on foreign commission in respect of exports under Drawback shipping bills (foreign commission not treated as input service for denial), and entitlement to refund is governed by the date of filing - claims filed before the amendment remain subject to the 2% FOB cap while claims filed after Notification No. 33/2008 are entitled to refund at 10% of FOB; impugned orders are set aside accordingly.

Extended period of limitation under proviso to Section 73(1) - Levy of Service Tax on storage and warehousing - auction proceeds of abandoned cargo - Service provider-service recipient relationship - Application of Board clarification on cargo handling to storage and warehousingExtended period of limitation under proviso to Section 73(1) - Invocation of extended period based on omission from ST-3 when 'auction income' was shown in books of account - HELD THAT: - The extended period was invoked solely because the 'auction income' was not declared in the ST-3 returns. The Show Cause Notice did not allege any wilful suppression or concealment with intent to evade tax. The auction income had been fully disclosed in the appellant's regular books of account (public documents) and the audit itself drew the information from the balance sheet. Applying the principle in CCE v. H.M.M. Ltd. as relied upon by the appellant, mere nondisclosure in ST-3 without suppression in books is insufficient to attract the proviso to Section 73(1). Consequently the extended period cannot be invoked and the demand is time-barred except insofar as it survives for one year prior to issuance of the SCN. [Paras 5]Extended period under the proviso to Section 73(1) cannot be invoked; demand survives only from 1-4-2007 onwards.Levy of Service Tax on storage and warehousing - auction proceeds of abandoned cargo - Service provider-service recipient relationship - Application of Board clarification on cargo handling to storage and warehousing - Whether the appellant's 'auction income' is liable to Service tax as consideration for storage and warehousing service - HELD THAT: - The appellant, as custodian, conducted auctions of abandoned cargo and retained auction proceeds after statutory payments. The Board's earlier clarification on auctioned abandoned cargo in the context of 'cargo handling service' stated that no service is rendered to any person in such auctions and tax is not leviable; the Court found that though the storage and warehousing levy was introduced later, the rationale of the clarification applies by inference. Moreover, transfer of title at auction characterises the transaction as a sale and not as rendering of storage/warehousing service to any identifiable recipient; successful bidders paid sales tax, and no importer ever came forward to claim goods or proceeds. In absence of a service provider-service receiver relationship and where the proceeds represent sale consideration adjusted for statutory dues, the auction income cannot be treated as consideration for storage and warehousing service. [Paras 6]No Service tax is payable on the auction income; the auction proceeds are not consideration for storage and warehousing service.Final Conclusion: The appeal is allowed: the extended period under the proviso to Section 73(1) is not invokable (demand survives only from 1-4-2007 onwards), and the auction income of abandoned cargo is not taxable as consideration for storage and warehousing service; the impugned order is set aside.

Ship Management Service - Business Support Service - Export of Service - Extended period / proviso to Section 73(1) - limitation - Exemption under Notification No. 4/2004-S.T. for services consumed within SEZ - Classification rule preferring most specific description (Section 65A)Extended period / proviso to Section 73(1) - limitation - Whether the demand is time-barred and the extended period under proviso to Section 73(1) is invocable - HELD THAT: - The adjudicator found that the appellant was a registered Steamer Agent filing returns regularly and audited periodically, and there was no suppression with intent to evade tax. Consequently the proviso to invoke the extended period could not be applied. As a result only the portion of the demand within one year of the relevant date survives, namely the period w.e.f. 1-4-2007. [Paras 5]The extended period is not invocable; demand survives only from 1-4-2007.Ship Management Service - Business Support Service - Classification rule preferring most specific description (Section 65A) - Whether the services rendered to M/s. Eagle Ship Management Pvt. Ltd. are classifiable as Ship Management Service or as Business Support Service - HELD THAT: - The Tribunal applied the statutory rule that a sub clause giving the most specific description must be preferred. Since providing crews (seafarers) is specifically included within the definition of Ship Management Service, and the primary and essential nature of the appellant's agreement was to supply seafarers, the activity is classifiable under Ship Management Service rather than the more general Business Support Service. The presence of the principal's representatives in India was held to be ancillary to the primary service of supplying crews; if infrastructure facilities were separately billed, those amounts could be taxed under BSS, but the core service is ship management. [Paras 5]The service is rightly classifiable under Ship Management Service.Export of Service - Whether the services supplied to the foreign principal amount to Export of Service and thereby attract exemption - HELD THAT: - Having held that the appellant provided seafarers to a foreign service receiver, the Tribunal applied the Export of Service Rules and noted that payment was received in convertible foreign exchange. The conditions of Rule 4 read with Rule 3 were therefore satisfied, and the services qualified as exported services, rendering them not liable to service tax for the surviving demand period. [Paras 5]The services are exported and not liable to Service tax for the surviving period.Exemption under Notification No. 4/2004-S.T. for services consumed within SEZ - Whether Steamer Agent services provided to SEZ units qualify for exemption under Notification No. 4/2004-S.T. - HELD THAT: - The Tribunal observed that SEZs are duty free enclaves deemed foreign territory and that services which commence outside but are utilised within SEZ units are to be treated as consumed within the SEZ. The Lower Authority had not disputed utilisation by the SEZ units. In view of the SEZ Act's overriding effect and the purpose of SEZ concessions, the appellant's Steamer Agent services consumed by SEZ units fall within the scope of Notification No. 4/2004 S.T. and are eligible for exemption. [Paras 5]The appellant is eligible for exemption under Notification No. 4/2004 S.T. for services provided to the identified SEZ units.Penalty - Whether penalty should be imposed - HELD THAT: - Since the demand does not survive on merits for the surviving period (being either exported or exempt in respect of SEZ consumption), the question of imposing penalty does not arise. [Paras 6]No penalty is to be imposed.Final Conclusion: The appeal is allowed: the extended period under Section 73(1) is not invocable so demand survives only from 1-4-2007; the services are classifiable as Ship Management Service; those services to the foreign principal qualify as Export of Service (payment in foreign exchange) and are not liable to service tax for the surviving period; services consumed by specified SEZ units are exempt under Notification No. 4/2004 S.T.; accordingly no penalty is imposed and the impugned order is set aside.

Pure agent - value of taxable service (inclusion/exclusion of reimbursed charges) - Service Tax (Determination of Value) Rules, 2006 - Rule 5(2) - pure agent conditions - Cenvat credit - eligibility of input service credit for services used in course of business - admissibility of credit on basis of debit notes under Rule 9(2) of Cenvat Credit Rules, 2004Pure agent - Service Tax (Determination of Value) Rules, 2006 - Rule 5(2) - value of taxable service (inclusion/exclusion of reimbursed charges) - Inclusion of transaction/turnover charges collected by the appellant in the taxable value and liability to pay Service tax on such charges for January 2008 to May 2008 - HELD THAT: - The appellant collected specified transaction/turnover charges from clients and remitted them to stock exchanges. The Department alleged these charges funded connectivity and were part of taxable value under Section 67 and Rule 5(1). Applying Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006, the Tribunal found the pure agent conditions satisfied and noted there was no dispute that no excess was collected or retained by the broker. The lower authority did not substantiate the contention that the charges were paid for connectivity such that they formed part of taxable value. Consequently the turnover/transaction charges qualify as amounts excluded from taxable value as those of a pure agent, and are not exigible to Service tax for the disputed period. [Paras 5, 6]The turnover/transaction charges collected are excluded from taxable value as amounts collected by the appellant as a pure agent; demand of Service tax thereon for January 2008 to May 2008 is set aside.Cenvat credit - eligibility of input service credit - services used in course of business - Admissibility of Cenvat credit on Service tax paid towards employees' insurance, food charges, subscription/books/periodicals and travelling expenses for the disputed period - HELD THAT: - Relying on the principle affirmed by the Bombay High Court in Ultratech Cement Ltd., services availed in the course of business are eligible as input services. The appellant established that the listed services were utilized in the course of its business activity and therefore satisfy the test for input service credit. On that basis the Tribunal held the appellant entitled to avail Cenvat credit on Service tax paid for employees' insurance, food charges, subscriptions/books/periodicals and travelling expenses during the disputed period. [Paras 5, 6]Cenvat credit on Service tax paid towards employees' insurance, food/ catering charges, subscription/books/periodicals and travelling expenses is allowed.Cenvat credit on debit notes - Rule 9(2) of Cenvat Credit Rules, 2004 - documentary requirements - admissibility of credit where service provider has paid Service tax and requisite particulars are on debit note - Entitlement to Cenvat credit claimed by the appellant on the basis of debit notes issued by an associate company for the disputed period - HELD THAT: - There was no dispute as to receipt of input services, payment of Service tax by the service provider, or presence of requisite details on the debit notes. The Tribunal observed that if the particulars required under Rule 9(2) are satisfied and the service provider has discharged the tax, the credit cannot be denied. Reliance was placed on precedent that permits credit where debit notes meet Rule 9(2) requirements. On these facts the denial by the lower authority was unjustified. [Paras 5, 6]Cenvat credit availed on debit notes raised by the associate company is allowed.Final Conclusion: The appeal is allowed: the demand of Service tax on transaction/turnover charges for January 2008 to May 2008 is set aside (appellant held to be a pure agent), and Cenvat credit on Service tax for employees' insurance, food charges, subscriptions/books/periodicals, travelling expenses and on debit notes of the associate company for the disputed periods is permitted.

Franchise service - representational right under franchise - franchisor-franchisee relationship - liability of service receiver to pay tax for taxable service provided from outside India - registration obligation for receipt of taxable service from outside India - double taxation / onus to prove prior discharge of taxFranchise service - representational right under franchise - franchisor-franchisee relationship - Whether the appellant's activity falls within the definition of franchise service - HELD THAT: - The Court examined the post-16-6-2005 definition of franchise which covers an agreement granting a franchisee representational right to provide services identified with the franchisor. The appellant was found to be the only franchisee/master distributor in India marketing the training programme identified with the foreign producer, using the producer's trade mark, logo and study material and operating under contractual guidelines. The agreement expressly grants representational rights and provides for sharing of initial fees and royalties; the appellant markets the course and pays royalty to the foreign producer. On these facts the activity is within the statutory definition of franchise service and consequently taxable as such. [Paras 5]Appellant's activity is franchise service.Liability of service receiver to pay tax for taxable service provided from outside India - registration obligation for receipt of taxable service from outside India - double taxation / onus to prove prior discharge of tax - Whether the appellant is liable to pay service tax on royalty paid to the foreign franchisor for the disputed period - HELD THAT: - The Court held that services provided by the foreign franchisor to the appellant amount to taxable franchise services and, since the service provider had no establishment in India, the statutory scheme (Rule 2(1)(d)(iv) read with Section 66A) renders the service receiver liable to pay service tax on such imported taxable services. The appellant's contention that no service was received in India, that it acted as a pure agent, or that the royalty had already suffered service tax was rejected: the record did not show that the appellant conducted no training using the materials, nor did it produce evidence that the service tax collected from distributors (which it alleged included amounts attributable to royalty) had in fact been deposited with the Department. The onus to prove prior discharge of tax lay on the appellant and was not discharged. [Paras 5]Appellant is liable to pay service tax on royalty paid to the foreign franchisor for January 2007 to December 2008; the contention of double taxation and pure agent status is rejected for lack of evidence.Final Conclusion: The appeal is rejected; the impugned Order-in-Original confirming demand of service tax on royalty paid to the foreign franchisor for January 2007 to December 2008 is upheld.

Reimbursement of actual expenses not includible in taxable value - taxation of only consideration retained by service provider - treatment of principal/agent or "pure" agent reimbursements - interest under Section 75 of the Finance Act, 1994 - penalty under Section 78 of the Finance Act, 1994Reimbursement of actual expenses not includible in taxable value - taxation of only consideration retained by service provider - treatment of principal/agent or "pure" agent reimbursements - Reimbursable amounts received from clients for expenses paid to third parties were not includible in the value of taxable services for the period January, 2007 to April, 2008. - HELD THAT: - The adjudicating authority accepted that the amounts received from the clients were reimbursable and paid onward to concerned third parties and were not retained by the appellant. The Court applied the settled principle that taxation is on the consideration received and retained by the service provider. Having regard to the nature of the transactions and the admitted character of the receipts as reimbursements, amounts such as electricity charges and other office expenses remitted on behalf of the client cannot be included in taxable value. Consequently the demand of service tax in respect of the reimbursable expenditure is unsustainable. The Court therefore held that no service tax is exigible on the impugned reimbursed amounts for the stated period and set aside the demand in that regard. [Paras 5]Demand of service tax of Rs. 60,418/- in respect of reimbursable expenditures for January, 2007 to April, 2008 is not sustainable and is set aside; no service tax is payable on those reimbursed amounts.Penalty under Section 78 of the Finance Act, 1994 - interest under Section 75 of the Finance Act, 1994 - Imposition of penalty under Section 78 and demand of interest under Section 75 in respect of the disputed reimbursable amounts are not sustainable. - HELD THAT: - The Court noted that during the material period there existed conflicting decisions and Board circulars on whether salary and other reimbursable expenses fall within taxable value, and that such authoritative clarifications supported the appellant's position. Given that the legal position was not free from doubt, imposition of penalty under Section 78 was held unsustainable. Similarly, insofar as interest was charged in relation to the disputed demand, the Court concluded that because the principal demand itself was not tenable, interest and penalty could not be sustained. The adjudicating authority's confirmation of penalty was therefore set aside. [Paras 5, 6]Penalty under Section 78 and interest charged in relation to the disputed reimbursements are quashed; the imposition of penalty is not sustainable in view of conflicting legal position and Board circulars.Final Conclusion: The appeal is allowed; the order confirming service tax on reimbursable expenses for the specified period, and the related interest and penalty, is set aside. Penalty under Section 78 and interest in respect of the disputed reimbursed amounts are quashed.

Limitation and extended period under proviso to Section 73(1) - service tax on cleaning activity and definition of "cleaning activity" - abatement for outdoor catering under Notification No. 1/2006-S.T. - Cenvat credit on common input services and its effect on abatement eligibility - relief under Section 80 from penalty imposed under Section 78Limitation and extended period under proviso to Section 73(1) - Survival of demand limited to the period w.e.f. 1-10-2007; earlier periods are time-barred as there was no suppression with intent to evade tax. - HELD THAT: - The appellant filed returns regularly and the Department was aware of the services rendered; there is no evidence of suppression with intent to evade payment of tax. Consequently, the proviso to the extended period cannot be invoked and the demand is partly time-barred, leaving only the period w.e.f. 1-10-2007 within limitation. [Paras 6]Demand survives only for the period w.e.f. 1-10-2007; earlier period is barred by limitation.Service tax on cleaning activity and definition of "cleaning activity" - Cleaning services rendered to Child Trust Hospital are not taxable as they do not fall within the definition of "cleaning activity" confined to commercial or industrial premises. - HELD THAT: - The statutory definition of "cleaning activity" covers cleaning of commercial or industrial buildings and premises; non-commercial buildings do not fall within the levy. The Department's reliance on circulars addressing educational institutions was inapposite to cleaning services of a non-commercial hospital. In view of the definition and the Ministry letter clarifying exclusion, the appellant need not pay service tax on cleaning services provided to the Child Trust Hospital. [Paras 6]No service tax is payable on cleaning services provided to Child Trust Hospital.Abatement for outdoor catering under Notification No. 1/2006-S.T. - Cenvat credit on common input services and its effect on abatement eligibility - Appellant is not entitled to the 50% abatement under Notification No. 1/2006-S.T. for outdoor catering services because they availed Cenvat credit on common input services, failing the notification's conditions. - HELD THAT: - Notification No. 1/2006-S.T. excludes from the abatement cases where CENVAT credit of duty on inputs or of service tax on input services used for providing the taxable service has been taken under the Cenvat Credit Rules. The records show the appellant availed Cenvat credit on common input services; therefore the condition for abatement is not fulfilled. For the surviving period (w.e.f. 1-10-2007) the appellant must pay service tax in full with interest. [Paras 6]Abatement under Notification No. 1/2006-S.T. is not available; service tax on outdoor catering must be paid in full for the surviving period.Relief under Section 80 from penalty imposed under Section 78 - Penalty imposed under Section 78 is set aside by invoking Section 80, as non-payment arose from interpretation of statute and there was no suppression with intent to evade tax. - HELD THAT: - Given the finding that there was no suppression of facts and the non-payment resulted from an issue of statutory interpretation, the appellant is entitled to relief under Section 80. The Lower Adjudicating Authority had already waived penalty under Section 76; accordingly the penalty under Section 78 is set aside. [Paras 6]Penalty under Section 78 is set aside by invoking Section 80.Final Conclusion: The appeal is allowed in part: the demand is confined to the period w.e.f. 1-10-2007; no service tax is leviable on cleaning services to Child Trust Hospital; abatement for outdoor catering is denied owing to Cenvat credit on common inputs and tax for the surviving period must be paid in full with interest; penalty under Section 78 is set aside by invoking Section 80. The impugned order is modified accordingly.