TaxTMI 
TaxTMI 
2026 (1) TMI 855
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....pectively, by which the appeals filed by the appellant herein came to be disposed by the Tribunal holding that the appellants herein are liable to pay Service Tax under the category of "event management service" for the period covered within the normal limitation. At the same time, the Tribunal also held that the demand of Service Tax in respect of management consultancy service and business support service, and interest liability for entries with reference to associated enterprise were not sustainable in law. FACTUAL MATRIX:- 3. The appellant assessee conducted annual Hindustan Times Leadership Summit (hereinafter referred to as, "the Summit"). Speakers were invited from outside India to address the Summit. The appellant entered into contracts with booking agents such as the Washington Speakers Bureau and Harry Walker Agency to book speakers such as Mr. Tony Blair, Mr. Jerry Linenger and Mr. Al Gore. 4. Show cause notices were issued under the Finance Act, 1994 (hereinafter referred to as "the Finance Act") inter alia proposing to impose Service Tax on fees paid to the speakers through the booking agents under the category of "Event Management Service" under Section 65(10....
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....Such Event Manager should be engaged in providing service to any person, and (c) Such service should be in relation to event management, i.e., planning, promotion, organizing, or presentation of any arts, entertainment, business, sports, marriage or any other event and includes any consultation provided in this regard. 12. The learned Counsel submitted that the TRU Circular dated 08.08.2002 clarified that Event Manager is a person who is engaged in managing the venue for an event, including decoration of sets, mandap, chair, table, barricades, sound, light video, electricals, security, communication, invitations to the event/sale of tickets and publicity of the event; & also has to manage stage show, artist, musician, choreographers & other miscellaneous items of work for holding of an event. 13. It was also argued that in the instant case the agents: (a) were neither event managers, nor were engaged in providing any service to the appellant. The agreements were signed by them as lecture booking agents of the speakers, on their behalf; (b) were not engaged in managing venue, decoration of sets, barricades, sound, light, security, communication, sale....
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....ng the speakers' presence in the Summit. (c) Merely because the agencies abroad represented themselves as 'booking agents', they would not automatically become agents of the speakers. For such an agency to arise, the contract must be in such a way that the booking agents conclude the contracts by way of an express authorization granted by the speakers to the booking agents. Such an authorization is conspicuous by its absence in the present case. (d) If the booking agents are indeed agents of the speakers as submitted by the appellant, there was no requirement for the booking agents to distance themselves from the speakers action, since their role will be limited to merely concluding the contract and will have no liability at all, since it is actually the speaker himself concluding the contract in the eyes of the law. (e) Lastly, the consideration that was paid by the appellant to the booking agent was not a payment made to the speaker directly. It was a payment made to the booking agent for procuring the speaker. Consequently, the gross amount charged by the booking agent would be the taxable value, on which the rate of Service Tax would apply. ....
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....as no application to the present case. 20. In such circumstances referred to above, the learned counsel prayed that there being no merit in the appeals those may be dismissed ANALYSIS:- 21. Having heard the learned Counsel appearing for the parties and having gone through the material on record, the only question that falls for our consideration is whether the fee paid by the appellant to the personalities/speakers, through their booking agents, is liable to Service Tax under the reverse charge mechanism, more particularly under the taxable category of "Event Management Service" under Sections 65(40) and 65(41) read with Section 65(105)(zu) respectively of Chapter V of the Finance Act? 22. The aforesaid issue falls for our consideration for the period of demand between October, 2009 and March, 2012. The revenue implication is to the tune of Rs. 60,56,180/- (Rupees sixty lakh fifty six thousand one hundred eighty). 23. Before adverting to the rival submissions canvassed on either side, we must look into few relevant provisions of the Finance Act. 24. During the period of dispute and up to 30.06.2012, Service Tax was levied on various categories of taxable services ....
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....vice in relation to event management in any manner" 26. Section 65(40) of the Finance Act defined 'event management' as follows: "'event management' means any service provided in relation to planning, promotion, organizing or presentation of any arts, entertainment, business, sports, marriage or any other event and includes any consultation provided in this regard" 27. Section 65(105)(zu) of the Finance Act, defined taxable service as follows: "65. ... (105) "taxable service" means any service provided or to be provided,- xxx xxx xxx (zu) to any person, by an event manager in relation to event management" 28. The Tax Research Unit of the Board vide Circular issued under F. No. B11/1/2002-TRU dated August 8, 2002 (hereinafter, the "Circular dated 08.08.2002") clarified inter alia in relation to Event Management Service as thus: "2. As per clause (34), "event management" means any service provided in relation to planning, promotion, organizing or presentation of any arts, entertainment, business, sports or any other event and includes any consultation provided in this regard. Vide clause (90)(zu), taxable service means any service....
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....egory of service i.e., under the positive definition of taxable services under the Finance Act and made liable to Service Tax as taxable service under various clauses of Section 65(105). Thus, for levy of Service Tax, taxable category of services of the Finance Act under which such service is liable to Service Tax has to be determined and proposed in the show cause notice issued by the Department; and (e) In case of taxable service provided from outside India to a person in India, the recipient of such service is liable to Service Tax under the reverse charge mechanism. SCHEME OF TAXABILITY 32. For the purpose of deciding the pivotal issue, it is first necessary to discuss the scheme of taxability under the Finance Act during the relevant period. The period of dispute is from October 2009 to March 2012. 33. It is not in dispute that during such period prior to 1.7.2012, the Service Tax was leviable only on the positive list of services as enumerated in Section 65(105) of Chapter V of the Finance Act. If the services strictly fall within such list, then they are taxable and if not, then no tax can be imposed on such services. 34. The only clause of the taxable l....
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....is regard". The contract of the asseessee with the booking agents was not for "management of an event" but for booking of the speaker. 40. The entire submission of the revenue focuses on the aspect as to whether a "principal-agent" relationship is established between the speaker and the booking agent. However, we are of the view that this is wholly irrelevant for the present controversy. The issue is not whether the relationship between the speaker and the booking agent is that of "principal-agent" or not. The issue is whether the contract constitutes "event management service". As discussed hereinbefore, the contract is for booking of speaker and not for event management and therefore, the levy of tax on such contract under the category of "Event Management Service" should fail. 41. The further argument of the revenue that, without the speaker the event would be devoid of any significance and therefore, the service in question is an "Event Management Service", also deserves to be rejected. That the presence of the speaker is essential for the event cannot be disputed. However, whether the service of the speaker or the agent on behalf of the speaker can be considered to be "e....
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....d publicity of the event. He has also to manage the stage show, artist, musician, choreographers and other miscellaneous items for holding of event. All services provided by the event manager are liable to service tax. This also covers any consultation provided for organizing and event..." 44. Thus, what is sought to be covered is the service of management or organizing of the event, and the revenue cannot be allowed to stretch the application of such a clause beyond its contours. 45. Having said so, we are also of the view that the classification dispute raised by the appellant, pursuant to the decision of this Court in International Merchandising Company LLC (supra), deserves to be rejected for the following reasons: (a) The appellant is correct insofar as the following is concerned: (i) Prior to 01.07.2012, the Service Tax regime had specific entries for each service. In other words, without a particular classification, the Revenue cannot tax any service. (ii) Consequently, a particular service cannot have two classifications and has to be traced under a specific subclause of Section 65(105). (iii) Since the disputed period is prior to 0....
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....from these decisions is that while construing the word "coal" in entry 1 of Part III of Schedule II, the test that would be applied is what would be the meaning which persons dealing with coal and consumers purchasing it as fuel would give to that word. A sales tax statute, being one levying a tax on goods, must, in the absence of a technical term or a term of science or art, be presumed to have used an ordinary term as coal according to the meaning ascribed to it in common parlance. Viewed from that angle both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include "charcoal" in the term "coal"." (Emphasis supplied) 47. Similarly, while deciding whether clinical syringes could be considered as "glassware" or not, this Court observed in the case of Indo International Industries v. Commissioner of Sales Tax reported in (1981) 2 SCC 528 as under: "It is true that the dictionary meaning of the expression "glassware" is "articles made of glass" (see Webster's New World Dictionary). However, in commercial sense glassware would never comprise articles li....