2019 (4) TMI 1698 - AT - Service Tax

Non-payment of service tax - service tax collected but not paid to Revenue - Interior Decorator Service - period 01.04.2003 to 28.02.2008 - HELD THAT - It is not clear that whether the appellant has recorded income under the head of design and consultancy income under these agreements or others. It is apparent that these two contracts submitted along with the appeal are not represent contract in that sense. It is therefore, necessary that all contract and account entries made by the appellant need to be examined before going to the final conclusion regarding liability to service tax under the head of interior decorator service. In the present case, it is apparent that in the said case did not involve any advisory consultancy or technical assistance. Thus it is apparent that the verification of the facts from the agreement is necessary before any decision on the issue is reached - the matter needs to be remanded to original adjudicating authority for examination of contract. Management, Maintenance and Repair Service - period 16.05.2006 to 28.02.2008 - HELD THAT - Appellant relies on the decision of Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I VERSUS ANS CONSTRUCTIONS LTD. 2009 (6) TMI 465 - CESTAT, NEW DELHI . It is seen that the period involved in the said case was 16.06.2005 to 28.02.2006, which is period prior to amendment in definition of Management of Maintenance and Repair Service. Prior to 01.05.2006 the said service was only applicable when provided in respect of immovable property, however, w.e.f 01.05.2006, the said service also become taxable when provide in respect of property other than immovable property. The decision in the case of ANS Construction was based on the ground that the grass and plants etc. being maintained by the appellant were not immovable property and thus not liable to tax under the definition of Maintenance, Management and Repair Service, as defined in 16.06.2005 - the decision would not be applicable for the period after amendment w.e.f 01.06.2006. Time limitation - HELD THAT - The appellant were paying the service tax on their own for certain period and later stop paying. They have also collected the service tax and not paid to the government tragedy in certain case. In these circumstances, the benefit of limitation cannot be extended to the appellant as the appellant were obviously aware of the law - penalty set aside. Appeal allowed by way of remand.

Summary

Issues:
1. Confirmation of demand of service tax, interest, and penalty under Sections 76, 77, and 78 of the Finance Act, 1994.
2. Classification of services under 'interior decorator' and 'Management, Maintenance, and Repair Services'.
3. Applicability of the definition of services under the Finance Act, 1994.
4. Benefit of Section 80 of the Finance Act, 1994.

Analysis:

Issue 1:
The appeal was filed against the confirmation of demand of service tax, interest, and penalty under Sections 76, 77, and 78 of the Finance Act, 1994. The appellant argued that they were engaged in garden-related activities and disputed the demand raised for the period between 2003 to 2008. The appellant had paid service tax until 2006 but ceased payments thereafter. The appellant also highlighted instances where service tax was collected but not deposited with the Revenue.

Issue 2:
Regarding the classification of services, the appellant contended that the demand was raised under 'interior decorator' and 'Management, Maintenance, and Repair Services'. The appellant presented contracts with specific entities to demonstrate that their activities were related to maintenance of plants, replacement of plants, and grass using seeds, fertilizer, and pesticides. The appellant argued that the services provided did not align with the definitions of 'interior decorator' or 'Management, Maintenance, and Repair Services' as per the Finance Act, 1994.

Issue 3:
The Tribunal examined the definitions of 'interior decorator' and 'Management, Maintenance, and Repair Services' under the Finance Act, 1994. It was noted that the contracts presented by the appellant did not involve consultancy, advisory services, or technical assistance as required by the definitions. The Tribunal emphasized the need to scrutinize all contracts and account entries to determine the liability to service tax accurately.

Issue 4:
The appellant sought the benefit of Section 80 of the Finance Act, 1994, citing changes in definitions during the relevant period and their belief that no tax was due. However, the Tribunal found that the appellant's awareness of the law, including collecting service tax but not remitting it to the government, precluded the extension of the benefit of limitation or Section 80.

In conclusion, the impugned order was set aside, and the matter was remanded for fresh adjudication and re-quantification based on the specific advisory, consultancy, and technical assistance provided under the contracts. The decision highlighted the importance of aligning services provided with the definitions under the Finance Act, 1994 for accurate tax liability determination.