2009 (6) TMI 568 - AT - Service Tax

Mandap keeper services and Health & Fitness Centre service- The respondent was paying service tax under the category of Mandap keeper service but stopped paying such service tax from 1-1-2002 to 13-7-2004 as availing exemption under Notification No. 12/01 dated 20-12-2001 but the department revealed that respondent suppressed the fact of providing convention service with intent to evade service tax. Commissioner (Appeals) allow the appeal. Held that- there is no suppression thus uphold the order of Commissioner (Appeals).

Summary

Issues involved:
Classification of services under service tax - Mandap keeper services vs. Convention services; Allegation of suppression of facts; Applicability of exemption Notification No. 12/01; Prospective application of Circular dated 2003; Limitation period for reclassification of services.

Analysis:

Issue 1: Classification of services under service tax
The case revolves around determining whether the services provided by the respondent for business organizations for conducting conferences should be charged under service tax as 'convention services' despite being registered under Mandap Keeper services and filing annual returns. The Revenue argued that the services fall under convention services, while the respondent contended that they should be classified only under Mandap Keeper services. The Tribunal analyzed the differences between the two services and concluded that if services cannot be classified based on specific descriptions, they should be categorized under the sub-clause that appears first in Section 65(105) of the Finance Act, 1994.

Issue 2: Allegation of suppression of facts
The Revenue alleged suppression of facts by the respondent for not paying service tax under the convention service category during a specific period, despite being registered as a Mandap keeper and availing exemption under Notification No. 12/01. However, the Commissioner (Appeals) found no justification for reclassifying the services after a significant period, especially when the nature of services had not changed, returns were submitted, and assessments were conducted regularly. The Tribunal concurred with the Commissioner's findings and held that there was no suppression of facts.

Issue 3: Applicability of exemption Notification No. 12/01
The Revenue contended that the exemption under Notification No. 12/01 should not apply to convention services, but the Commissioner (Appeals) interpreted a Board Circular stating that if a service provider is already registered under one category and paying service tax, they are not liable to pay tax again under another category. The Tribunal agreed with this interpretation and held that the circular favored the appellant, supporting their claim for exemption under Notification No. 12/01.

Issue 4: Prospective application of Circular dated 2003
The Circular dated 2003 was cited by the Revenue to argue against the exemption for convention services. However, the Tribunal held that the Circular should be applied prospectively, following the Supreme Court's rulings in similar cases. While the Circular could be considered for the period it was issued onwards, the Tribunal found that the case primarily rested on limitation grounds, and no tax was leviable on the respondent even for the subsequent period mentioned in the Circular.

Conclusion:
The Tribunal rejected the Revenue's appeal, upholding the Commissioner (Appeals) order as correct and legal. It affirmed that the services provided by the respondent were rightly classified under Mandap Keeper services, and there was no suppression of facts. The exemption under Notification No. 12/01 was applicable, and the Circular dated 2003 had prospective application. Therefore, the impugned order was upheld, and the Revenue's appeal was deemed devoid of merits.