2024 (11) TMI 1347 - AT - Service Tax

Demand of service tax under the head of Mandap Keeper Services - invoking extended period of limitation - HELD THAT - As the appellant is a statutory body and no individual would gain from avoiding or evading tax. In these circumstances, we concur with the aforesaid decision to hold that there cannot be any intention to evade payment of duty and therefore, invocation of extended period of limitation cannot be sustained. The appellants can only be liable for the period within the period of limitation. Liability of tax for the period post 01.07.2012 - Taxability of services provided by a government authority under the negative list post 01.07.2012 - Revenue has sought to classify the service in the nature of Mandap Keeper Service under the category of support service - No merit in the argument of Revenue that the service in the nature of Mandap Keeper can be classified under the category of support services . From the definition of support services , it is clear that only the services which are in the nature of outsourced services i.e. the functions that entities carry out in ordinary course of operations themselves but may obtain as service by the outsourcing from others for any reason whatsoever. The services in the instant case do not qualify as support services and therefore, the services provided by the appellant are covered under the negative list. In these circumstances we find that after 01.07.2012 the services provided by the appellant are covered by the negative list.

Summary

Issues:
1. Contention on limitation for demands raised under Mandap Keeper Services.
2. Taxability of services provided by a government authority under the negative list post 01.07.2012.

Analysis:

Issue 1:
The appeals were filed by a Municipal Corporation for demands raised for Mandap Keeper Services for the period 2008-2009 to 2012-2013. The Chartered Accountant for the appellant contested the demands on the grounds of limitation and taxability. The impugned order lacked findings on the limitation issue, and the appellant relied on previous decisions to argue that as a statutory body, there was no intent to evade tax, thus limiting the liability to the normal period. The Tribunal concurred with this view, holding that there was no intention to evade duty, and the extended period of limitation could not be applied, limiting the liability to the period within the limitation period.

Issue 2:
Regarding the taxability of services provided post 01.07.2012, the negative list of services excluded services by the government unless falling under specific categories. The Commissioner denied the benefit of the negative list to the appellant, stating a lack of proof that services were provided to non-business entities. The appellant argued that the services did not qualify as 'support services' as defined, and therefore, were covered under the negative list post 01.07.2012. The Tribunal agreed, stating that the services did not fall under the definition of 'support services,' and thus, the services provided by the appellant were covered by the negative list post 01.07.2012. For the period before this date, the demand was restricted by limitation. Consequently, the impugned orders were modified accordingly.

This judgment clarifies the application of limitation in tax demands and the interpretation of the negative list for government-provided services post 01.07.2012. It emphasizes the importance of establishing intent to evade tax and correctly categorizing services for tax liability determination.