2018 (7) TMI 1672 - AT - Service Tax

Business Exhibition Service - right to others lease out stalls - scope of SCN - the original SCN did not invoke extended period whereas the revision SCN has invoked it - whether allowing the contractor to lease or rent stalls for exhibition is taxable under business exhibition services ? - whether the Revenue proceedings have been gone beyond the scope of the original SCN? Scope of SCN - Held that - The original SCN has mentioned that the appellants suppressed the facts of rendering taxable service with intent to evade payment of Service Tax and they fail to declare their taxable turnover to the Department. The revision SCN has only expanded the reasons for invoking extended period; since original SCN made mention of extended period, it is concluded that the SCN has not gone beyond scope. Taxability of the service rendered by the appellants - Held that - The main objective of the Cultural Dusshera Exhibition is to propagate and project the Cultural and Literary heritage and technical achievements and educational and sociological advancement in the State. The bidder of the tender would let out the allotted area or stalls to the interested people who wish to put up their stalls. The stalls are used to put up shops for selling their products; taxable service requires that the Service Tax should be provided to the exhibitor - there is no service rendered by the appellants to the exhibitor, in fact, the successful tenderer will give it to individual shops, the service receiver as well as the appellants are concerned, is the tenderer but not the individual exhibitors of the shops - leasing stalls and land will not fall under the category of business exhibition services as held by the Revisionary Authority. As the appeals sustain on merits, the question of charging interest and levying penalty could not survive. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether allowing the contractor to lease or rent stalls for exhibition is taxable under "business exhibition services"?
2. Whether the Revenue proceedings have exceeded the scope of the original Show Cause Notice (SCN)?

Analysis:

1. Revenue Proceedings Scope:
The appellants argued that the original SCN did not invoke the extended period, while the revision SCN did. The Tribunal noted that the original SCN mentioned the suppression of facts regarding taxable services and failure to declare taxable turnover. As the original SCN hinted at the extended period, the Tribunal rejected the appellants' contentions.

2. Taxability of Service Rendered:
The appellants, a society organizing exhibitions, leased stalls for an annual cultural show. The Tribunal observed that the appellants' objective was to propagate cultural heritage, not promote business. The successful tenderer leased stalls to individual shops, making the tenderer the service provider, not the appellants. The Tribunal concluded that the activity of leasing stalls did not fall under "business exhibition services" and was not taxable.

3. Legal Precedents and Arguments:
The appellants cited cases to support their stance, emphasizing their cultural propagation objective. The Revenue argued that the appellants' activities, like providing stalls through a middleman, constituted marketing and made them liable for Service Tax. However, the Tribunal found no direct service provided by the appellants to exhibitors, supporting the non-taxability of their actions.

4. Conclusion and Relief Granted:
The Tribunal allowed the appeals, stating that the appellants' activities were not taxable under "business exhibition services." The Tribunal highlighted that the appellants could have been charged for promoting commercial use, but such taxation was applicable only from a specific date. Consequently, interest and penalties were deemed unnecessary due to the appeal's merit-based success.

In conclusion, the Tribunal ruled in favor of the appellants, emphasizing the non-taxable nature of their activities under "business exhibition services" and granting consequential relief.