2023 (8) TMI 796 - AT - Service Tax

Tribunal overturns Commissioner's decision on service tax liability for events, citing lack of reasoning and limitation period issues.

M/s. Quality Council of India Versus Commissioner of Central Excise, New Delhi

The Tribunal set aside the Commissioner's decision on service tax liability for 'Quality Conclave' and 'Seminar Receipts' under 'Convention Service' and ... Levy of Service tax - Convention service - Sponsorship Service - Grants/Contribution received from the Government, which were taxable under the category of Event Management Service or not - extended period of limitation. HELD THAT:- It appears that the argument was not taken by the appellant before the Adjudicating Authority, as it appears from the impugned order. Extended period of limitation - HELD THAT:- The Adjudicating Authority observed that the appellant have not contested the same and though the 'Convention Services' and 'Sponsorship Services' were made taxable with effect from 16.07.2001 and 01.05.2006 respectively but the appellant failed to get these services included in their Registration Certificate and also failed to declare them in the ST-3 Returns. On that basis, he concluded that the appellant willfully suppressed the information with an intent to evade service tax liability and, therefore, imposed the penalty under Section 77 and 78 of the Act - The order is completely silent as to any findings of fact on fraud, collusion or wilful misstatement or suppression of facts or violation of provisions of the Act or the Rules. The impugned order is unsustainable and deserves to be set aside - matter remanded back to the Adjudicating Authority to decide the issues on merits as well as on extended period of limitation and on interest and penalty afresh after recording reasons in support thereof - appeal allowed by way of remand. Issues Involved:1. Service Tax Liability on 'Quality Conclave' and 'Seminar Receipts' under 'Convention Service.'2. Service Tax Liability on 'Sponsorship Service.'3. Applicability of Extended Period of Limitation.Summary:Issue 1: Service Tax Liability on 'Quality Conclave' and 'Seminar Receipts' under 'Convention Service'The appellant, registered with the Service Tax Department, was scrutinized for not paying service tax on 'Quality Conclave' and 'Seminar Receipts' taxable under 'Convention Service.' The Commissioner dropped the demand for 2007-2008 and 2008-2009 due to no income under these heads but confirmed the demand for 2009-2010 to 2011-2012 for Rs.1,65,18,639/-. The appellant argued that their delegates are not clients and their meetings are open to the public, thus not fitting the definition of 'Convention.' The Tribunal found the order non-speaking, lacking reasoning and application of mind to the service definitions.Issue 2: Service Tax Liability on 'Sponsorship Service'The appellant contended that the expenditures shown under 'Sponsorship/Awareness Programme/Seminar' included unrelated expenses. The Commissioner rejected this, citing lack of documentary evidence and consistency in the appellant's figures. The appellant also argued that they are a 'Society' and not a 'Body Corporate,' thus not fitting the definition of 'Sponsorship Service.' The Tribunal found the adjudicating order non-speaking and lacking in reasoning.Issue 3: Applicability of Extended Period of LimitationThe appellant challenged the show cause notice as time-barred, arguing that earlier notices covered different services. The Commissioner invoked the extended period, alleging willful suppression of information. The Tribunal found that the order did not discuss the basic ingredients for invoking the extended period, such as fraud or willful misstatement.Conclusion:The Tribunal set aside the impugned order for being non-speaking and lacking reasons. The matter was remitted back to the Adjudicating Authority to decide afresh on merits, extended period of limitation, interest, and penalty, with liberty for both parties to raise all contentions. The appeal was allowed by way of remand.