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2021 (7) TMI 251 - CESTAT NEW DELHI
Taxability - convenience fee - fee charged on its customers for online booking of movie tickets - online information and database access retrieval system [OIDAR] services or not - period 01.04.2007 to 31.12.2011 - extended period of limitation - demand of interest and penalty as well.
Invocation of extended period of limitation - suppression of facts or not - whether wilful suppression of facts is necessary or just suppression (unknowingly) is also sufficient for invocation of extended time? - HELD THAT:- It is clear from the facts that as far back as on 27.07.2009 the Department was aware that the appellant had been collecting convenience fees from customers and by 11.08.2010 the Department was also aware of the quantum of convenience fees collected, which amount has also been mentioned in the show cause notice dated 14.06.2012. It is, therefore, more than apparent that the Department was aware of the collection of convenience fees by the appellant much before one year from the date of issue of the first show cause notice dated 14.06.2012. It cannot, therefore, be said that the appellant had suppressed facts relating to collection of convenience fee from the Department and, therefore, the confirmation of demand by the Commissioner for the period 01.04.2007 to 31.03.2011 is clearly not warranted.
The Supreme Court and the Delhi High Court have held that suppression of facts has to be “wilful’ and there should also be an intent to evade payment of service tax - It would also be useful to refer to a decision of the Tribunal in Shiv-Vani Oil & Gas Exploration Services Ltd.[2016 (10) TMI 878 - CESTAT NEW DELHI], wherein the Tribunal after making reference to the decision of the Supreme Court in Cosmic Dye Chemical vs. CCE, Bombay [1994 (9) TMI 86 - SUPREME COURT], observed that there should be an intent to evade payment of service tax if the extended period of limitation has to be invoked.
It is, therefore, clear that even when an assessee has suppressed facts, the extended period of limitation can be invoked only when “suppression’ is shown to be wilful with intent to evade the payment of service tax - even suppression of facts has to be wilful and in any case, suppression has also to be with an intent to evade the payment of service tax. There is no finding by the Commissioner as to whether suppression of facts was wilful and in the context of intent, the Commissioner held that there is no necessity that suppression of facts has to be with an intent to evade the payment of service tax.
The confirmation of demand of service tax of ₹ 1.27 crores on convenience fees for the period commencing 01.04.2007 to 31.03.2011 is beyond the prescribed period of one year contemplated under section 73(1) of the Finance Act and, therefore, this demand deserves to be set aside.
Whether the convenience fees that is charged by the appellant from each user over and above the prescribed value of the movie ticket can be subjected to service tax under OIDAR? - HELD THAT:- A conjoint reading of the clauses of the Terms & Conditions of the contract would indicate that the purpose for charging convenience fee is to receive a consideration for offering a facility of online booking and in the facts of the present case would relate to online booking of tickets. It needs to be noted that the purpose of the transaction is to book and procure a ticket online by a user, though the website may provide for various other information like the current movie being exhibited, the upcoming movies and the timing of the movies. These information are even otherwise available through newspaper advertisements or other advertisements and no charge is leviable for the same - It is clear that the pith and substance and the dominant intention of the arrangement is not to access/retrieve data/information but it is an arrangement by which the facility of online booking is made available to users.
There is no manner of doubt that the essential characteristic of the arrangement under consideration in these appeals is availing the facility of online booking of ticket and not accessing/retrieving any data/information. Service tax under the category of OIDAR, therefore, cannot be levied upon a user merely because he receives a code for getting a printout of the ticket from the cinema hall.
The inevitable conclusion that convenience fee is not charged by the appellant for any access/retrieval of information or data base. Service tax under OIDAR cannot, therefore, be levied upon the appellant for the period prior to 01.07.2012. The appellant has stated that it started discharging service tax on convenience fees under the negative list regime after July 1, 2012 under the category of “other taxable services” - the confirmation of demand of service tax of ₹ 1.27 crores for the period 01.04.2007 to 31.03.2011 out of the total demand of ₹ 2,02,31,146/- covered under the two show cause notices dated 14.06.2012 and 15.03.2014 cannot also be sustained for the reason that it is for a period beyond the prescribed period of one year contemplated under section 73(1) of the Finance Act and the extended period of limitation could not have been invoked.
Demand of interest and penalty - HELD THAT:- As the confirmation of demand under the two notices cannot be sustained, the imposition of penalty and interest under sections 78 and 75 of the Finance Act cannot also be sustained.
The impugned order confirming the demand of service tax under the two show cause notices dated 14.06.2012 and 15.03.3013 is liable to be set aside and is set aside - Appeal allowed - decided in favor of appellant.