Limitation and binding circulars defeated service tax demand on already assessed mandap keeper services.

Service tax demand was held time-barred because the record did not establish deliberate suppression, so the extended limitation period could not be invoked. The service was also not treated as taxable convention services where the provider was already registered and assessed as a mandap keeper and had been paying tax under that category. The departmental clarification protecting such treatment was applied, while the later January 2003 circular was treated as prospective only. The department's challenge therefore failed, and the assessee succeeded on limitation and merits.

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Issues: (i) Whether the demand of service tax was barred by limitation for want of suppression, and (ii) whether the services rendered by the respondent were liable to be taxed as convention services despite registration and taxation as mandap keeper services.

Issue (i): Whether the demand of service tax was barred by limitation for want of suppression.

Analysis: The respondent had been registered and assessed under the existing service category for a long period and had filed returns. The reclassification was sought only later, and the record did not establish any deliberate suppression sufficient to justify invocation of the extended period. The factual foundation for limitation was not successfully controverted.

Conclusion: The demand was barred by limitation and the finding on absence of suppression was upheld in favour of the assessee.

Issue (ii): Whether the services rendered by the respondent were liable to be taxed as convention services despite registration and taxation as mandap keeper services.

Analysis: The departmental clarification stated that where a service provider was already registered as a mandap keeper and paying service tax, the same service was not to be taxed again as convention services. The later circular issued in January 2003 could operate only prospectively, and for the earlier period the respondent was protected by the earlier clarification and exemption regime. Even for the later period, the demand did not survive in view of the limitation finding.

Conclusion: The services were not held taxable as convention services for the disputed period, and the assessee succeeded on merits as well.

Final Conclusion: The Revenue's challenge failed in full, the demand was unsustainable, and the order in favour of the respondent was sustained.

Ratio Decidendi: Departmental circulars are binding on the department, and a beneficial circular operates retrospectively while an oppressive circular operates prospectively.

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