2019 (11) TMI 787 - AT - Service Tax

SSI exemption - use of brand name while providing Mandap Keeper s Services - N/N. 6/2005-ST dated 01 March, 2005 - Revenue entertained a view that inasmuch as the present appellant M/s Amit Resorts were providing services under the brand name of M/s Hotel Garg, the benefit of SSI Exemption Notification cannot be availed by them in terms of proviso to Para 1 of the Notification - extended period of limitation - HELD THAT - In the present case M/s Hotel Garg is not using expression Garg which is their family surname but a specifically designed G is being used by them thus indicating a connection between Hotel Garg and general public. As such, the Lower Authorities have rightly held that the appellant was using the brand name of another person while providing services and as such was not entitled to SSI exemption benefit. Extended period of limitation - the demand stands raised for the period 2009-10 - penalty - HELD THAT - The issue involved is a bona fide issue of interpretation and there being no positive evidence indicating any mala fide on the part of the assessee, we are of the view that the demand is required to be restricted to the normal period of limitation - For the same reason, there are no justification for imposition of penalties upon the assessee. The matter is remanded to the Original Adjudicating Authority for re-quantification of the demand falling within the limitation period.

Summary

Issues:
Service tax demand under 'Mandap Keeper's Services'; Applicability of Small Scale Exemption Notification No.6/2005-ST; Use of brand name of another entity; Invocation of longer period of limitation for demand; Imposition of penalties.

Analysis:
1. The appellant availed the Small Scale Exemption Notification but faced a service tax demand under 'Mandap Keeper's Services'. Revenue found that the appellant operated under the brand name of another entity, M/s Hotel Garg, which rendered them ineligible for the exemption. Investigations revealed identical booking slips and records shared between the appellant and M/s Hotel Garg.

2. The Revenue raised a demand for service tax from 2009-10 to 2014-15 through a show cause notice, which was confirmed by the Original Adjudicating Authority. The appellant's appeal against this decision was unsuccessful before the Commissioner (Appeals), leading to the current appeal.

3. The appellant did not dispute providing services under the brand name of M/s Hotel Garg. The use of the letter 'G' in documents indicated a connection to M/s Hotel Garg, a distinct entity. Unlike a previous Tribunal decision involving a family surname, the use of a brand name here does not entitle the appellant to the SSI exemption benefit.

4. The demand was raised invoking the longer period of limitation, despite the issue being a bona fide interpretation matter with no evidence of malice from the appellant. The Tribunal deemed the demand should be limited to the normal period of limitation and found no grounds for imposing penalties.

5. Consequently, the matter was remanded to the Original Adjudicating Authority for recalculating the demand within the limitation period, with all penalties being set aside entirely.