2023 (6) TMI 955 - AT - Service Tax

Dispute over taxable services under Finance Act, 1994 resolved with limitations on demand.

Bombay Chamber of Commerce & Industry Versus Principal Commissioner of CGST & Central Excise Mumbai South (Vice-Versa)

The appeal involved a dispute over demand confirmation under various taxable services of the Finance Act, 1994. The adjudicating authority restricted the ... Recovery of Service Tax - consideration received for alleged rendered of club or association service - technical inspection and certification service - business support service - convention service - extended period of limitation - HELD THAT:- It is seen that the entire amount reflected in the balance sheet under the head has been subjected to taxation merely because no exhibitions have been organized during the disputed period. Fastening of liability under Finance Act, 1994 without any attempt at eliciting the nature of the activity actually undertaken is sufficiently ‘vague’ not to discard the contention of appellant that extended period of limitation cannot be invoked. Hence the demand on ‘convention service’, to the extent of being beyond normal period of limitation, is set aside. The secretarial service rendered to various bodies, such as Container Shipping Lines Association, Bombay City Policy Research Foundation, etc., to the extent that they are not members are liable to tax under the head of ‘support service of business or commerce’ and, therefore, devolves on the appellant - there are no reason to hold the charges collected under this head to be liable to tax under ‘club or association service’ as enumerated except those involving non-members which is not evidenced. The demand confirmed under these two heads, amounting to ₹ 2,62,038/- and ₹ 1,78,190/- respectively, would need to be subjected to scrutiny by the original authority for conformity with the definition of the respective heads under which these had been confirmed. Insofar as the appeal of Revenue is concerned, the objection has been solely on the ground that the adjudicating authority has relied upon the certification issued by a chartered accountant. The certificate issued by a professional functioning under the aegis of Institute of Chartered Accountants of India (ICAI) cannot easily be brushed away as inconsequential and unreliable - The jurisdictional committee of Chief Commissioners appears to have been guided merely by academic doubt and upon justifiable doubt emanating from responsible ascertainment of error in determination of the respective proportions. Sufficient time was available to carry out that exercise before elapse of deadline for undertaking review as provided for in Finance Act, 1994. The proposition in the appeal of Revenue that the segregation adopted by the adjudicating authority requires verification is not tenable as valid justification even for directed remand. In the absence of any material ground to discard the certification adopted by the adjudicating authority, and in the light of the acceptance of the principle adopted by the adjudicating authority that services rendered to members is not liable to tax in the hands of Bombay Chamber of Commerce and Industry, there are no reason to accede to this relief sought in the appeal of Revenue. Thus, demand of ₹ 1,25,68,933/- and ₹ 1,27,286/-, allegedly liable for having rendered ‘technical inspection and certification service’ and ‘convention service’, is set aside for nonconformity with the period of limitation in section 73 of Finance Act, 1994. Insofar as the confirmation of demands of ₹ 2,62,038/- and ₹ 1,78,190/- are concerned, the appropriate authority would need to determine the taxability of arbitration charges as well as the amount collected from members for rendering of secretarial service - Appeal of Revenue is dismissed. Issues Involved: Appeal against order confirming demand under various taxable services of Finance Act, 1994. Issue 1 - Club or Association Service, Technical Inspection and Certification Service, Business Support Service, Convention Service: The appellant, M/s Bombay Chamber of Commerce & Industry, and Principal Commissioner of CGST & Central Excise contested the confirmation of demand under section 73 of Finance Act, 1994 for services provided. The adjudicating authority found the activities fell under specific sections of the Act. The demand was restricted based on settled law and plea regarding services provided to non-members. Issue 2 - Time Limitation for Demand: The appellant argued against the confirmation of demand beyond the normal period of limitation, citing discharge of tax liability and lack of ingredients for invoking the extended period. Revenue challenged the reliance on a chartered accountant certificate and sought review based on certification accuracy. Issue 3 - Technical Inspection and Certification Service: The demand for this service was contested, arguing that circular basis for taxation was inappropriate. The appellant contended that circulars cannot override statutory provisions. The extended period for demand was found inapplicable due to lack of evidence for invoking it. Issue 4 - Convention Service and Support Service for Business or Commerce: The demand for convention service was disputed as activities were open to members subject to fees, not falling under taxable service definition. The demand for support service was challenged for lack of clarity on the nature of activities. The demand on these services beyond the normal period of limitation was set aside. Issue 5 - Verification of Certification: Revenue objected to reliance on chartered accountant certification, seeking verification. The certification was defended as reliable, and no material ground was found to discard it. The segregation adopted by the adjudicating authority was deemed justifiable. Judgment: The demand for technical inspection and certification service and convention service was set aside due to nonconformity with the period of limitation. The appropriate authority was directed to determine the taxability of arbitration charges and secretarial service amount. The appeal of the assessee was disposed of on these terms, while the appeal of Revenue was dismissed.