2015 (12) TMI 148 - AT - Service Tax

Benefits under Board Circular No. 80/2004-S.T., dated 17-9-2004 - pandal and shamiana service - Held that - Primary Authority rejected the claim for benefits under Board Circular No. 80/2004-S.T., dated 17-9-2004 on the ground that pandal and shamiana service provided to facilitate congregation of the Nirankari Mandal was a spiritual purpose but not for worship of gods or goddesses. According to the primary Authority, Nirankari Mandal preaches spirituality, oneness of god and goddesses which is a holy purpose but not a purely religious ceremony. - conclusion is irresistible and compelling that the primary adjudication order, issued without a show cause notice is unsustainable and non est. The setting aside of such an order by Appellate Commissioner including for the reason that no show cause notice is impeccable and warrants no appellate interference - Decided against Revenue.

Summary

Issues:
- Appeal against Commissioner (Appeals) order dated 3-11-2008 allowing respondent-assessee's appeal
- Assessability of pandal and shamiana service to Service Tax
- Claim of benefits under Board Circular No. 80/2004-S.T., dated 17-9-2004
- Rejection of benefits claim by primary Authority
- Appeal on grounds of lack of notice and merits
- Conclusion on the sustainability of the primary adjudication order

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI was lodged by the Revenue against the order of the Commissioner (Appeals), Allahabad, dated 3-11-2008, which had favored the respondent-assessee. The core issue revolved around the assessability of pandal and shamiana service provided by the assessee to Sant Nirankari Sansthan/Mandal at Allahabad under the purview of Service Tax. The assessee contended that the service fell outside the tax liability scope as per Board Circular No. 80/2004-S.T., dated 17-9-2004, exempting services related to pure religious ceremonies and congregations from Service Tax.

The primary Authority initially dismissed the assessee's claim for benefits under the said Board Circular, arguing that the service was not solely for the worship of gods or goddesses but for spiritual purposes related to the Nirankari Mandal. The Authority distinguished between spiritual and purely religious ceremonies, asserting that the activities of the Mandal were more aligned with preaching spirituality and oneness of deities rather than traditional religious worship.

Subsequently, the assessee appealed against the primary Authority's decision, citing procedural irregularities such as the absence of a show cause notice before assessment. The Appellate Authority, while acknowledging the lack of notice, proceeded to evaluate the merits of the case and determined that the service provided by the assessee indeed fell within the exemption outlined in the Board Circular. Moreover, the Appellate Authority overturned the primary order not only on the grounds of lack of notice but also on the substantive issue of applicability of the Circular.

In its final ruling, the Appellate Tribunal emphasized the fundamental requirement of a show cause notice before issuing an adjudication order, deeming the primary order as unsustainable and non est. The Tribunal upheld the Appellate Commissioner's decision to set aside the primary order, emphasizing the impeccable nature of the decision due to the absence of a show cause notice. Consequently, the Tribunal dismissed the appeal by the Revenue, declaring it devoid of merits and absolving the respondent-assessee of any costs associated with the proceedings.