2019 (5) TMI 373 - AT - Service Tax

Time Limitation - Non-payment of service tax - Stall charges - events conducted abroad claiming export of services and media charges - penalty u/s 77 and 78 of FA - HELD THAT - From the facts on record, it is very much evident that the allegations of short payment of service tax was brought up against the respondents after audit and verification of Profit and Loss Account and Trial Balance. The difference between the taxable value shown in the ST-3 returns filed for the period 2003-04 to 2007-08 and the P L account was alleged to be suppressed and non declared value and hence the tax liability of ₹ 39,04,099/- was proposed thereon and, which was confirmed by the adjudicating authority with interest thereon - even before the adjudication stage, the respondent has been contending that no tax is required to be paid both on stall charges and export services. It is not the allegation that assessee had not filed ST-3 returns. There are no justifiable reasons or grounds to allege suppression or fraud etc. with intention to evade payment of tax on the part of the assessee. Even as early as 23.09.2004, assessee had submitted a letter addressed to the department wherein they had informed the scope of nature of their activities - the Commissioner (Appeals) is correct in ordering that the extended period of limitation cannot be invoked in this case and that the SCN will only be valid for the normal period of limitation. Media charges - HELD THAT - The Commissioner (Appeals) has correctly concluded that services rendered by the assessee under Section 65(105) (zzzm) ibid, namely services provided in relation to sale of space for advertisement in print media are exempted from paying service tax as per provisions of law during disputed period. Appeal dismissed - decided against Revenue.

Issues:
1. Short payment of service tax on stall charges, events conducted abroad, and media charges.
2. Invocation of longer period for tax demand.
3. Classification of services for tax liability.
4. Maintenance of proper records for input services.
5. Validity of penalties imposed under various provisions of law.

Short Payment of Service Tax on Stall Charges, Events Conducted Abroad, and Media Charges:
The case involved M/s. Nuysell Interactions (P) Ltd. providing services like Event Management, Business Exhibition, and Sale of Space for advertisement services. The Revenue filed an appeal against the Order-in-Appeal setting aside the original authority's order due to short payment of service tax. The discrepancies in taxable value shown in ST3 returns and Profit and Loss Account led to the demand of ?39,04,099/- with penalties imposed. The Revenue contended that short payment was due to non-payment of service tax on stall charges, events conducted abroad, and media charges. The Commissioner (Appeals) partly set aside the original order, leading to the Revenue's appeal.

Invocation of Longer Period for Tax Demand:
The Revenue argued that the demand was not time-barred and that the assessee was liable to pay service tax on stall charges, events conducted abroad, and media charges. However, the Commissioner (Appeals) found that the demand for the period from 2003 to October 2007 was barred by limitation. The Commissioner considered various contentions of the respondent, including regular filing of ST-3 returns, and concluded that the extended period of limitation cannot be invoked. The Commissioner also found that media charges were exempt from service tax during the disputed period.

Classification of Services for Tax Liability:
The Commissioner (Appeals) analyzed the contentions of the respondent regarding the classification of services and found that the demand made without proper classification was not sustainable. The Commissioner held that the demand period was time-barred except for a specific period. The services provided by the assessee were found to be exempt from service tax based on the law during the disputed period.

Maintenance of Proper Records for Input Services:
The respondents were found to have contravened Rule 9(6) of CCR 2004 by not maintaining proper records for input services, leading to short payment of service tax. The failure to disclose activities to the Department and lack of proper documentation resulted in penalties being imposed. However, the Commissioner (Appeals) found no suppression of facts by the assessee to evade tax payment.

Validity of Penalties Imposed Under Various Provisions of Law:
The Revenue's appeal was dismissed as no grounds were found to modify or set aside the impugned order. The Commissioner (Appeals) correctly concluded that the assessee was not liable to pay service tax on certain services, and the penalties imposed were not upheld. The cross objections filed by the respondent were also disposed of in line with the dismissal of the Revenue's appeal.

This detailed analysis of the legal judgment highlights the key issues, arguments presented by both parties, and the final decision rendered by the Appellate Tribunal CESTAT CHENNAI.

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