2018 (8) TMI 1220 - AT - Service Tax

Event Management Service - non-payment of service tax - date when the service became effective - Circular No.80/10/2004-ST dt. 17/09/2004 - Held that - In terms of Circular No.80/10/2004-ST dt. 17/09/2004 make it very clear that the said type of programmes are clearly considered as business exhibition and organizers of such service are exempted under the category of Business Exhibition Service rather than Event Management Service - it is clear that the services provided to the organizers is alone covered under event management and organizing of an event is not covered. Further the Board circular categorically mentions that road shows and camps are covered under the Business Exhibition Service. The services rendered by the appellants come under Business Exhibition Service chargeable to service tax prior to 10/09/2004 - portion of the demand confirmed requires to be dropped and the same has to go to the original authority for quantification of the tax payable by the appellants for the period 10/09/2004 to 15/12/2004. Penalty - Held that - The issue being one related to interpretation of the provisions of statute, penalty cannot be imposed on the appellants. Appeal allowed by way of remand.

Issues:
1. Whether the appellants are liable to pay service tax for organizing business exhibitions and event management services.
2. Interpretation of circulars issued by the Board regarding Business Exhibition Service and Event Management Service.
3. Calculation of service tax on the value pertaining to the portion of management for event organization.
4. Applicability of penalties and extended period of limitation in cases of interpretation of statute.

Analysis:

Issue 1: Liability for Service Tax
The Department alleged that the appellants, engaged in organizing business exhibitions and event management, did not pay service tax for a specific period. The Order-in-Original confirmed a demand, penalty, and interest. The appellants argued that they were only organizers of exhibition events, not covered under Event Management Service. They contended that Business Exhibition Service, introduced in 2004, should be the basis for tax liability.

Issue 2: Interpretation of Circulars
The appellants cited various circulars to support their claim that they are exempt from service tax under Business Exhibition Service. The Tribunal analyzed the distinction between Business Exhibition Service and Event Management Service based on the circulars, concluding that the appellants' activities fell under Business Exhibition Service. The Tribunal emphasized the binding nature of the Board's circulars on the officers.

Issue 3: Calculation of Service Tax
The appellants argued that if taxable, service tax should apply only to the management portion's value, not the entire event cost. They claimed that penalties and extended period of limitation were unjustified due to the interpretation of the statute involved.

Issue 4: Penalties and Limitation
The Tribunal remanded the case to the original authority to quantify the taxable amount for the relevant period and directed the appellants to pay the tax accordingly. However, the imposition of penalties was set aside, considering the issue as related to the interpretation of statutory provisions.

In conclusion, the Tribunal allowed the appeal in part, emphasizing the appellants' liability under Business Exhibition Service and the need for quantification of tax payable. The decision highlighted the importance of adhering to Board circulars in determining tax liabilities and penalties in cases involving statutory interpretation.

This detailed analysis of the judgment covers the issues raised, the arguments presented, and the Tribunal's decision, providing a comprehensive understanding of the legal aspects involved in the case.

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