TaxTMI 
TaxTMI 
2023 (7) TMI 57
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....ltancy Services, Sponsorship Services, club or Association Services, Advertising Services & Convention Services specified under section 65(105) of the Finance Act, 1994 (hereinafter referred to as the Act). The appellant opted for centralized Registration being a Northern Region Head Quarter and the permission was granted for the same by the Commissioner on 24.02.2005 for the Mandap Keeper Service, Exhibition Services & Management Consultancy services etc. Further after addition of few more new services, the Centralized registration was granted by the Commissioner on 16.12.2008. 3. During the course of audit it was observed that the appellant was providing the services under the category of convention services but had started paying service tax on the same from 16.05.2008 only whereas the service tax on the said services was leviable from 16.07.2001. 4. The appellant started paying service tax from 16.05.2008 only when the words 'client' was substituted with 'any person'. The appellant was providing this service to various firms/companies engaged in the manufacturing activities or providing services on payment of duty/taxes. Any person who was sponsored by such firms or the r....
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....08-09, difference of Rs. 2,43,17,676/- was found. As per the balance sheet the appellant had shown the receipt of Rs. 15,18,93,982/- and as per ST-3 returns they had shown the assessable value as Rs. 12,75,76,306/-. The service tax on differential amount of Rs. 2,43,17,676/- come to Rs. 27,76,582/- which appeared to be recoverable along with interest from the appellant. 6. Apart from the above, the appellant also received the payment during the period from 2005-06 to 2010-11 as detailed below: (i) Reimbursement of electricity charges: 22,69,072/- (ii) Sponsorship Income: 84,20,000/- (iii) Govt. Grants: 48,43,550/- (iv) Govt. Grants received during 2009-10 and 2010-11 (upto August, 2010): 33,00,000/-. 7. The appellant had also shown receipt of Rs. 22,69,072/- on account of reimbursement of electricity consumption charges but had not paid service tax on these charges on the plea that it was only reimbursement of charges of electricity consumption and they had not shown the same in their invoices also. But they had paid service tax on the gross amount from the exhibitors, which also included in the electricity charge. On being pointed out the ....
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.... of Rs. 40,88,606/- as these regional meetings were held for specific purpose and the entry was restricted to members only and also contribution from the members was being taken thus the same was covered under the convention services and the appellant appeared to be liable to pay service tax on such conventions. As such the appellant appeared to have short paid service tax of Rs. 6,23,871/- which is recoverable along with interest from them. 9. The appellant filed detailed reply to the show cause notice, thereafter, by following the due process Commissioner passed the impugned order dated 30.04.2012 confirming the demand under various heads against which the appellant filed this appeal. 10. Heard both the parties and perused the material records. 11. Ld. Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law. He further submitted that the appellant organizes various types of conventions/work shops. Members of the public participant in the convention, seminars and workshop and they pay participation fee. The demand of service tax is on this participation fee. He re....
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....n. The said activity is squarely covered by the principle of mutuality as approved by the Supreme Court in the case of State Vs. West Bengal Vs. Calcutta Club Limited reported in 2019 (29) G.S.T.L. 545 (S.C.)] 14. As regards the demand based on balance sheet, Ld. Counsel submitted that prior to 2011 service tax was discharged on cash receipt basis whereas balance sheet was made on mercantile/accrual basis and thus there shall always be difference between ST-3 and balance sheet figures. He further submitted that the figures in the balance sheet reflects the income and expenditure of the organization and has nothing to do with liability or payment of service tax. The service tax is paid on specific heading, bases on invoice and not on the gross amount. The demand of the department is bases solely on the gross figure available without any supporting evidence and hence is vague and liable to be dropped. For this submission, he relied upon the decision in the case of Karan Textile Industries Vs. Commissioner of C. Ex. Surat [2008 E.L.T. 863 (Tri.- Ahmd.). 15. With regard to the demand of service tax on reimbursement of electricity expenses. Ld. Counsel submitted that the appellant....
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..... 913 (Tri.-Mumbai] 3. Compark Service Private Limited Vs. Commissioner [2019 (24) G.S.T.L. 634 (Tri.-All.)] 18. He further submitted that the penalties is not leviable without establishing ingredients of the proviso of section 73. Further, the assessee has acted on bonafide belief that the service tax is not payable. 19. On the other hand, Ld. DR reiterated the findings of the impugned order. 20. We have heard the rival contention of both the parties and carefully gone through the material on record. 21. Firstly, we take up the demand of service tax on "Convention Service" for the period 18.04.2006 to 15.05.2008. The case set-up by the Revenue is that the appellant is providing "Convention Service" as defined under Section 65 (105) (zc) readwith Section 65 (32) of the Finance Act, 1994 whereas the stand of the appellant is that they do not provide any service to any person "in relation to holding of a convention'. It is the finding of the Ld. Commissioner that the appellant organizes various types of conventions/workshops. Members of the public participate in the conventions, seminars and workshops and they pay a participation fee which is subject to service t....
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.... interested in the subject matter of the convention can participate in the convention by paying a 'delegate fee'. Once the convention is open to general public, then it is not a convention within the meaning of 'Convention' under service tax law and consequently no demand of service tax can be raised on convention service. 24. As far as the demand of service tax of Rs. 6,23,871/- on annual general meeting under convention service, we find that this demand is not sustainable as the annual general meeting is organized for the members themselves as it is a members organization and the members meet in annual general meeting to discuss various issues relating to the organization and accounts etc. However, this meeting is not open to general public. This activity is squarely covered by the principle of mutuality as approved by the Hon'ble Apex Court in the case of State of West Bengal vs. Calcutta Club Ltd. - 2019 (29) GSTL 545 (S.C.). 25. As far as demand of service tax of Rs. 22,70,068/- based on differential amount under convention service is concerned, we are of the opinion that this demand is also not sustainable as the figures in the balance sheet reflects the income and expe....
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....rages (P) Ltd. 2007 (213) ELT 487 (S.C.) which is reproduced herein below:- "The show cause notice is the foundation on which the department has to build up its case. If the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show cause notice". The same view was taken in M/s Mahindra and Mahindra vs. CCE 2001 (129) ELT 188. 29. Similarly, the Hon'ble High Court of Delhi in the case of Commissioner of Service Tax vs. ITC Ltd. 2014 (36) STR 481 (S.C.) has observed as under:- "14. The object and purpose of issue of show cause notice is to inform the assessee so that reply or submissions can be made and relevant facts which are in the knowledge of the assessee can be brought on record. After examining and consideration of the show cause notices, we feel that the assessee was informed and made aware of the contention of the revenue and their stand and stance. The specific agreement(s) which were sought to be brought and charged to Service Tax under the head 'Business Auxiliary Se....
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.... we find that in this case, extended period of limitation has been invoked without any justified reason because the allegation made in the show cause notice does not specifically mentions as to what fact the assessee was to inform, which was suppressed. In this regard, we rely upon the observation made by the Hon'ble Apex Court in the following cases:- (i) Padmini Products vs. Collector 1989 (43) ELT 195 9 (SC) (ii) Uniworth Textile Limited vs. Commissioner 2013 (288) ELT 161 (SC.) (iii) CCE vs. HMM Limited 1995 (76) ELT 495 9 (SC) In view of these circumstances, we hold that the substantial demand of service tax is barred by limitation. 32. As far as levy of penalty is concerned, once we hold that the service tax itself is not leviable, the question of imposing penalty does not arise. 33. In view of our discussion above, we hold that the impugned order is not sustainable in law and is liable to be set-aside and we do so accordingly. 34. In result, the appeal is allowed. (Pronounced on 28.06.2023) ============= Document 1 2. Any service provided for holding a conference, seminar, meetings etc by a commercial concern will come under ....