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2017 (9) TMI 1005 - AT - Service TaxEvent management service - Reverse charge mechanism - Held that: - It is clear that the appellants are not having any transaction directly with the eminent speakers, who are to give speech in the Annul Summit organized by the appellant. Arranging such eminent speakers is one of the important ingredients of event management. In this aspect, the agents in foreign countries ensured the availability of persons to such event, for a fee. Such fee is a total gross amount to be paid by the appellant to the agent. The claim of the appellant is that such agents are acting as representative of the speaker and as such should be considered as one of the same, with no separate role in between - the activities of the foreign agents is covered by the statutory scope of event manager. Management Consultancy Services - pure agent - Held that: - It is clear that to be “Pure Agent”, that the provider of service has to make payment to the third party on behalf of the principal (service recipient) and such arrangement should be on actual basis with prior knowledge, in terms of the agreement. Conditions No.(iii) read with (iv) will make it clear that if the appellant is making payments as authorized by the service recipient on actual basis then such expenses shall not form part of the taxable value - On perusal of the documents submitted by the appellant in support of their claim for consideration as Pure Agent and also upon perusal of the agreement dated 1.8.2008 between these two parties, the impugned order is not sustainable in rejecting the claim of the appellant for consideration as pure agents. Business Support Services - re-imbursement from group companies for expenditure incurred on their behalf - Held that: - The appellants did not provide any infrastructure support service using any of their infrastructure or providing any service to other group companies. The infrastructure facilities were commonly shared and the third party was paid by the Nodal Company (appellant). Thereafter the said expenditure was apportioned with other group companies, who availed the same service - the appellants and other group companies are service recipient though the considerations were initially paid by the appellant and proportionately thereafter, distributed to other group companies - tax liability withheld. Interest on delayed payment of service tax - services provided to associated enterprises - Held that: - admittedly the appellants made entries of taxable considerations in their books of accounts. These entries relate to the period prior to the date of the said amendment. However, the appellants discharged the service tax liability much belatedly in Jan. 2009 and March, 2010 and March, 2011. These tax payments were with reference to entries made prior to 10.05.2008. The Original Authority confirmed the interest w.e.f. that date. The Board vide Circular dated 29.02.2008 clarified that for transaction between associated enterprise any credit/debit in the books of account shall be considered for tax liability in case of provision of taxable service - for entries made prior to 10.05.2008, no interest liability will arise. Time limitation - penalty - Held that: - The service tax liability was held to be enforceable on reverse charge basis only w.e.f. 18.04.2006. In such situation, it will not be correct to allege willful mis-statement, suppression or fraud against the appellant to demand tax for the extended period. The demand for normal period in terms of Section 73 can only be sustained - penalty also set aside. Appeal allowed - decided partly in favor of appellant.
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