2007 (1) TMI 176 - AT - Service Tax

Commissioner dropping demand on a charitable institution holding that activity of developing human resources at the rural level for staff of charitable organizations or Government bodies, does not come within the ambit of Management Consultant - application for condonation of delay by revenue delay not explained - no time chart nor affidavit filed - appeal dismissed on ground of limitation - impugned order of Commissioner is upheld on merits also - condonation and stay application rejected

Summary

Issues:
Delay in filing application for condonation of delay; Classification of respondent unit as a Management Consultant unit; Applicability of service tax on a charitable institution.

Delay in filing application for condonation of delay:
The Revenue filed an application for condonation of delay of 53 days, citing non-receipt of the order and service of the impugned order in a different section. However, the application lacked a supporting affidavit and a time chart to explain the delay. The Tribunal found the grounds insufficient, as the Commissioner (Appeals) had validly dropped the demands of service tax on a charitable institution. The Commissioner noted that the respondent was engaged in developing human resources at the rural level for charitable organizations or Government bodies, not as a Management Consultant. The Tribunal reviewed the order and found no inherent infirmity to set it aside. Consequently, the Tribunal rejected the condonation of delay application, stay application, and the appeal for lacking merit.

Classification of respondent unit as a Management Consultant unit:
The Revenue considered the respondent unit as a Management Consultant unit, leading to the demand for service tax. However, the Commissioner (Appeals) determined that the respondent's activities were focused on developing human resources at the rural level for charitable organizations or Government bodies, not falling within the ambit of Management Consultant services. The Commissioner's analysis concluded that the respondent's activities did not warrant the imposition of service tax. The Tribunal upheld the Commissioner's decision, finding no basis to overturn the order. Consequently, the Tribunal rejected the appeal, as it lacked merit in challenging the classification of the respondent unit.

Applicability of service tax on a charitable institution:
The core issue revolved around the applicability of service tax on a charitable institution. The Commissioner (Appeals) thoroughly examined the nature of the respondent's activities and concluded that the respondent's role in developing human resources for charitable organizations or Government bodies did not align with Management Consultant services subject to service tax. The Tribunal concurred with the Commissioner's findings, emphasizing that the respondent's charitable endeavors did not fall within the scope of taxable services. Consequently, the Tribunal dismissed the appeal, as it failed to establish the applicability of service tax on the charitable institution based on the activities in question.