TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 796
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty Conclave" and "Seminar Receipts" taxable under the category of "Convention Service" and also on the expenditure incurred on the "Sponsorship Service" under RCM as well as on the Grants/Contribution received from the Government, which were taxable under the category of 'Event Management Service'. Accordingly, show cause notice dated 19.10.2012 was issued in respect of the said three services falling under Section 65 (105)(zc), 65(105)(zzzn) and 65(105)(zu) of the Act. 3. The show cause notice was adjudicated by the impugned order, where the learned Commissioner held that during the period 2007-2008 and 2008- 2009, there was no income from 'Quality Conclave' and 'Seminar receipts' and hence the demand for the said period was dropped. However, during the FY 2009-2010 to 2011-2012, income of Rs.1,65,18,639/- was received under the said heading, which was leviable to service tax. Similarly, for the service tax liability under the category of 'Sponsorship Service', the Adjudicating Authority held that the details submitted by the noticee were not supported by the documentary evidence and the explanation given is an after-thought so as to compress the taxable value of the services. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 65(32) of the Act, Convention means, "a formal meeting or assembly, which is not open to the general public, but in their case, the meeting or assembly is open to the general public." It appears that such argument was not taken by the appellant before the Adjudicating Authority, as it appears from the impugned order. In order to maintain the demand for the FY 2009-2010, 2010-2011 and 2011-2012, the Adjudicating Authority merely observed that :- "6.4 I have carefully gone through the instant show cause notice and find that para 3 of the show cause notice reads as under:- "It has been observed that the assessee has received amount under the head "Quality Conclave and Seminar Receipts" during the period 2007-08 to 2010-11." 6.5 I have very carefully gone through the Balance Sheets and all the other documents available on record and find that income from "Quality Conclave Seminar Receipts" finds a mention in the Balance Sheets pertaining to the F.Y 2009-2010, 2010-2011 & 2011-12 only. For the F.Y. 2007-2008, head of income in the Balance Sheets has been shown as Honorarium, Sale of Packs and Misc. Receipts and for the F.Y. 2008-2009, the head of income has been shown as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Banquet and Room Rent, etc. The noticee also submitted some Annexures giving some vague details regarding expenses pertaining to above heads. I further find that the noticee have bee submitting contradictory figures of the amount spent by them on various activities including the amount spent on Sponsorship Services and on input services, where they claimed to have paid service tax to their vendors but did not claim the benefit of Cenvat credit. I have carefully gone through the details/annexure submitted by the notice. I find that the noticee have not disputed their liability for payment of service tax under Sponsorship Services as demanded in the show cause notice. They have only disputed the value of taxable services. At the time of personal hearing held on 20.01.2015, the noticee themselves disclosed that they were now paying service tax on expenditure incurred by them on Sponsorship Services. I find that the details submitted by the notice regarding taxable value are not supported by any documentary evidence and are very vague in nature and the same cannot be accepted to be authentic. 6.9 I am of the considered opinion that it is an afterthought of the notice to compress th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt in Commissioner of Central Excise and Customs V Chandubhau Shiroya - 2010 (18) STR 526 (Guj), wherein relying on the decision of the Apex Court in State of Rajasthan V Rajendra Prasad Jain - JT 2008 (3) SC 159, the Gujarat High Court laid emphasis on giving reasons in support of the decision and observed : "9. The legal position in this regard is, by now, well-settled. The giving of reasons in support of their conclusions by judicial, quasi-judicial and administrative authorities when exercising jurisdiction is imperative, in order to avoid any element of arbitrariness or unfairness which may attach to unreasoned conclusions. The Tribunal is a quasi-judicial forum and while deciding matters, it has to bear in mind that a speaking order is required to be passed as it is adjudicating upon the Order-in-Appeal made by the Commissioner (Appeals) in which the Order-in-Original has merged. As the order made by the Tribunal is an appealable one, it should be ensured that it is founded on cogent reasons. The reasons contained in an order may not be lengthy or elaborate but, at the same time, they must reflect proper application of mind and an understanding of the pros and cons of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the sphinx", it can, by its silence, render it virtually impossible for the Courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system; reasons at least sufficient to indicate an application of mind to the matter before Court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made; in other words, a speaking out. The "inscrutable face of a sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance. 10. The above position was highlighted in State of Orissa v. Dhaniram Luhar [JT 2004 (2) SC 172; 2004 (5) SCC 568]." 11. This Court has, similarly, also time and again reiterated the necessity of giving reasons by the Tribunal. In Tax Appeal No. 81 of 2005 - Jay Enterprises v. Commissioner of Central Excise decided on 4-5-2005, this Court has summed up the legal position in the following terms : "It is necessary for CEGAT to assign reasons while disposing of an appeal before it. Reasons are....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... otherwise of an order made by CESTAT in absence of any reason in the order made by CESTAT. For this reason also the impugned order cannot be permitted to stand." The above are just a few extracts from relevant judgments elaborating upon the settled legal position which is no longer res integra. No doubt, there are a catena of judgments stating the necessity of passing reasoned orders. 13. It can also be said that the reasons are like the bricks with which the edifice of justice is built. If the bricks are not in place, or are missing, the entire edifice comes crashing down. The conclusions arrived at by a judicial or quasi-judicial authority should rest upon the foundation or reasons and cannot be sustained if they are in the air. An order passed by a quasi-judicial forum has to be supported by convincing and cogent reasons, howsoever brief they may be." 10. Similarly, the other decision referred by the learned Counsel for the appellant is Commissioner of Central Excise & Customs, Daman Vs. Bilag Industries Pvt. Ltd. - 2011(264) ELT 195 (Guj), where again the learned Division Bench reiterated the principle of supporting the findings with reasons. 11. The appellant has als....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inion, untenable. If that were to be true, we fail to understand which form of non-payment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or willful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso. 19. Thus, Section 28 of the Act clearly contemplates two situations, viz. inadvertent non-payment and deliberate default. The former is canvassed in the main body of Section 28 of the Act and is met with a limitation period of six months, whereas the latter, finds abode in the proviso to the section and faces a limitation period of five years. For the operation of the proviso, the intention to deliberately default is a mandatory prerequisite. 26. Hence, on account of the fact that the burden of proof of proving mala fide conduc....