2009 (7) TMI 202 - AT - Service Tax

Revenue being aggrieved by the impugned order holding that no service tax can be imposed on the charges recovered from the milk Union by the appellant Federation under the category of Management Consultancy Services - Revenue s grievance is that the respondent Federation gets some charges for providing consultancy to various Milk Unions. - The present case is of a nodal agency of the State of Madhya Pradesh which is contributing to the purpose of milk production in the State, regulating various activities of the Unions. The respondent is an organ of the State without being commercially engaged in providing Management Consultancy, assists the Milk Unions of the State. Record does not reveal that other than the guidance and instructions to the milk union of the State, this respondent has ever guided or issued instructions to any other agency in a commercial manner - appellant s activities were known to law for which extended period of limitation was not invokable There is no any allegation of suppression of fact or mis-declaration or fraud to invoke the extended period - the authority below has rightly allowed appeal of the respondent both on merits as well as on limitation

Summary

The Appellate Tribunal CESTAT, New Delhi, consisting of Members D.N. Panda and Rakesh Kumar, heard Cross Objection No. ST/CO/8/2008-CUS (BR) where the Revenue appealed against a decision by the Commissioner that no service tax could be imposed on charges from a milk Union by the appellant Federation under Management Consultancy Services. The Revenue argued that the Federation received charges for consultancy services, satisfying the definition in Section 65(65) of the Finance Act, 1994. The Respondent's representative, Shri Arun Mehrotra, argued that the Federation was a statutory body providing administrative guidance and assistance without acting commercially. The Tribunal reviewed the Commissioner's findings and agreed that the Federation was a non-commercial entity assisting Milk Unions in Madhya Pradesh, and therefore not liable for service tax. The Tribunal upheld the Commissioner's decision, dismissing the Revenue's appeal and the Respondent's cross objection. The order order was dictated and pronounced in open court.