2024 (3) TMI 754 - AT - Service Tax

Levy of service tax - Business exhibition service - Demand on electricity charges - Mandap keeper service - penalty - HELD THAT - The appellants are engaged in various activities and the department, based on their documents like ledgers, etc., considered certain services as falling under certain specific headings and therefore, liable to service tax. Business exhibition service - HELD THAT - The Original Authority has not given substantive grounds to cover their activities and has not effectively rebutted their submissions. On the other hand, the judgment cited by the appellant in M/S. KARNATAKA EXHIBITION AUTHORITY VERSUS C.C.,C.E. S. T-MYSORE 2018 (7) TMI 1672 - CESTAT BANGALORE , which covers almost identical activities clearly holds that such activities would not fall under business exhibition services . Therefore, demand in both the appeals under the category business exhibition service is not sustainable and accordingly, demand to that extent is set aside. Demand on electricity charges - HELD THAT - It appears that they were being collected on actual basis and being submitted to the electricity department and therefore, the same cannot be liable to service tax and therefore, the demand to that extent is also set aside. Mandap keeper service - HELD THAT - The demand on Mandap Keeper service amounting to Rs.9,727/- is upheld as he has already accepted the demand on services other than Business Exhibition service . Penalty - HELD THAT - In view of the facts of the case and lack of substantive grounds to establish any deliberate attempt to evade service tax, the penalty under Sec. 76, 77 and Fine under Sec 70 are also set aside. Appeal allowed in part.

Summary

Issues involved: Classification of services under 'Business Exhibition Service' and 'Mandap Keeper Service', imposition of service tax, penalty under Sec 76, Sec 77, and fine under Sec 70 of the Finance Act, 1994, non-compliance with mandatory Pre-deposit, applicability of judgment in Karnataka Exhibition Authority vs CC, CE & ST, Mysore [2018 (7) TMI 1672 (CESTAT-Bangalore)].

Classification under 'Business Exhibition Service' and 'Mandap Keeper Service': The appellant, engaged in Business Exhibition Service and Mandap Keeper Service, faced a demand for service tax on various charges collected. The Original Authority considered the appellant's activities as falling under taxable service u/s 65(105)(zzo) for 'Business Exhibition Service' and 'Mandap Keeper Service'. The Adjudicating Authority confirmed the demand and imposed penalties under relevant sections of the Finance Act, 1994.

Non-compliance with mandatory Pre-deposit: The Commissioner (Appeals) dismissed the appeal due to non-compliance with mandatory Pre-deposit, leading the appellant to approach the Tribunal against the dismissal.

Applicability of judgment in Karnataka Exhibition Authority case: The appellant contested the demand, citing a judgment that activities similar to theirs did not qualify as 'Business Exhibition Service'. The Tribunal considered the judgment and found that the activities in question did not fall under the category of 'Business Exhibition Service', setting aside the demand to that extent.

Decision and Outcome: The Tribunal set aside the demand for 'Business Exhibition Service' and electricity charges, as they were not found to be liable for service tax. However, the demand for 'Mandap Keeper Service' was upheld. The penalties and fine were set aside due to the lack of substantive grounds for deliberate evasion of service tax. The appeals were partly allowed based on the above findings.

Judges: MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. A.K. JYOTISHI, MEMBER (TECHNICAL)