2017 (4) TMI 702 - AT - Service Tax

Business Auxiliary service - empanelment fee - charge-ability to service tax - Held that - for every event for which the appellant gives their auditorium on hire they are collecting empanelment fee from the respective vendors. From the arrangement it is evident that the business of Vendors gets promoted by the appellant for which they are collecting the said fee. The same would be covered by the definition of BAS as defined under Section 65(105) (zzb) read with Section 65(19) of the FA 1994 and therefore the amounts collected as empanelment fee would be chargeable to service tax under BAS - In order to quantify the confirmed demand for normal period the matter is remanded to the original adjudicating authority. Extended period of limitation - Held that - there has not been any evidence available on record to state that the appellant suppressed the facts from the Department with the intention to evade the service tax on the empanelment fee collected by them - the extended period in this regard cannot be invoked u/s 73(1) of the FA 1994. Appeal is partly allowed and matter remanded for quantification of demand.

Summary

Issues:
Non-payment of service tax on taxable services categorized as Business Auxiliary Service (BAS).

Analysis:
The appellant, an auditorium, appealed against an order concerning non-payment of service tax on empanelment fees. The appellant argued that the empanelment fee was a precautionary measure and not for services provided to vendors. The tribunal analyzed the definition of Business Auxiliary Service (BAS) under the Finance Act, 1994, and found that the empanelment fee collected by the appellant was chargeable to service tax under BAS. The tribunal referred to the Order-in-Original and the findings of the Commissioner (Appeals) to support this conclusion. The tribunal agreed with the lower authorities on the chargeability of service tax on the empanelment fee under BAS.

The tribunal noted that there was no evidence of the appellant suppressing facts to evade service tax, so the extended period for invoking demand was not applicable. The demand was confirmed only for the normal period. The tribunal also discussed the appellant's reliance on a High Court judgment regarding mandap keeper services, clarifying that the issue in the present case was not covered by the cited judgment. The matter was remanded to the original adjudicating authority for quantifying the confirmed demand within a specified timeframe.

Additionally, the tribunal addressed the liability of service tax on Mandap Keeper Services, confirming the liability for the normal period and remanding the matter for quantification. The tribunal considered the appellant's argument that the service tax paid by the caterer should be available as credit to the appellant, which would be decided by the adjudicating authority during the recalculation process. Ultimately, the appeal was partly allowed and remanded for further proceedings.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the arguments presented by the appellant, the legal interpretation of relevant provisions, and the tribunal's decision and reasoning in addressing the non-payment of service tax on taxable services categorized as Business Auxiliary Service.