TMI Blog2023 (7) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... frastructure for conduct of the conventions. By no stretch of imagination, the appellant can be termed as a commercial concern as they are a body of the industry formed as a trust to protect the interest of industry. Therefore, notwithstanding the fact that they are collecting certain sums for providing the infrastructure for holding conventions, they cannot be termed as a commercial concern to be liable to pay service tax for this activity - Once the convention is open to general public, then it is not a convention within the meaning of Convention under service tax law and consequently no demand of service tax can be raised on convention service. Levy of Service Tax - convention service - annual general meeting - HELD THAT:- This demand is not sustainable as the annual general meeting is organized for the members themselves as it is a members organization and the members meet in annual general meeting to discuss various issues relating to the organization and accounts etc. However, this meeting is not open to general public. This activity is squarely covered by the principle of mutuality as approved by the Hon ble Apex Court in the case of STATE OF WEST BENGAL ORS. VERSUS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demanded on receipt under Modular Employment Scheme. In the absence of any specific category, the demand of service tax is vague and liable to be dropped. Extended period of Limitation - HELD THAT:- In the present case, the appellant-assessee has acted on bonafide belief that they are not liable to pay service tax and the department was aware of the working of the assessee and the appellant-assessee has been paying service tax wherever they are liable to pay. Further, the entire demand has been raised on the basis of figures declared by the appellant in invoices, balance sheet duly audited and submitted to various authorities and therefore in such situation extended period of limitation is not invokable - extended period of limitation has been invoked without any justified reason because the allegation made in the show cause notice does not specifically mentions as to what fact the assessee was to inform, which was suppressed - the substantial demand of service tax is barred by limitation. Levy of Penalty - HELD THAT:- Once it is held that the service tax itself is not leviable, the question of imposing penalty does not arise. The impugned order is not sustainable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant was required to pay service tax on convention services from 18.04.06 onwards when from the definition the words commercial concern was substituted with any person but the appellant started paying service tax from 16.05.2008. As per the department, the appellant was liable to pay service tax of Rs. 91,79,716/- on the convention services provided by them for the period 18.04.2006 to 15.05.2008 which appeared to be recoverable along with interest. Further, the appellant had shown the convention service income of Rs. 67,38,642/- and 23,43,564/- under management Consultancy services Business Exhibition Services respectively on which service tax of Rs. 8,29,296/- 2,86,852/- respectively was not paid. As such the appellant is liable to pay service tax of Rs. 1,02,95,854/- which appeared to be recoverable along with interest. 5. For the period from 16.05.2008 onwards under the head of convention services, the appellant had paid service tax on the delegation fee received from delegates attending the Seminar/conference/Convention. On reconciliation of figures as reflected in the balance sheet, it was observed by the audit that there was a difference of Rs. 1,88,35,080/- for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de GAR-7 no. 00277 dated 09.11.2009. The service tax on such charges appeared to be recoverable on the gross amount charged to the exhibitor by the appellant and was taxable under Section 55(105)(zzo) of the Finance Act. 8. As regards the payment of service tax on sponsorship the appellant submitted that the liability of payment of service tax of sponsorship services was of the party which was giving sponsorship and not of the recipient of the sponsorship. As per the figures provided by the appellant an amount of Rs. 84,00,000/- in the year 2006-07 and 2007-08 had been received by the appellant towards sponsorship as per Rule 02(d)(vii) inserted with effect from 01.05.2006 in the case of sponsorship service provided to a body corporate or firm located in India, the body corporate or firm receiving such sponsorship would be liable to pay service tax. Further, the appellant had not paid the service tax on government grants amounting 48,43,550/- received during the period 2005-06 to 2008-09, on the ground that this amount had been collected as contribution from various government departments. This amount was shown in the balance sheet under the head income and formed the part of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been defined in Section 65(32) of the Finance Act, as (32) convention means a formal meeting or assembly which is not open to the general public, but does not include a meeting or assembly, the principal purpose of which is to provide any type of amusement, entertainment or recreation; -the Service is taxable only when service is provided to some person in relation to holding of a convention . The services are in the nature of providing space, equipment etc. To person organizing the convention. CBEC explained the ambit of service vide letter F.No.B. 11/1/2001-TRU, Government of India, Ministry of Finance, Department of Revenue, New Delhi, dated the 9th July, 2001; Annexure-III. The issue has further been clarified vide CBEC circular no. 51/13/2002, dated 07.01.2003 [ F.No. 178/2002-CX.4]. 12. He further submitted that the convention service is taxable only when the services are provided to some person in relation to holding of a convention. CBEC explained the ambit of service vide letter F.No.B. 11/1/2001-TRU dated 09.07.2001. The issue has further been clarified by CBEC circular No. 51/13/2002, dated 07.01.2003. He further submitted that it is clear from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this reimbursement amount which is contrary to what has been held by the Delhi High Court in the case of Inter Continental Vs. Union of India reported in 2013 (29) S.T.R. Delhi. And the said judgment has been affirmed by the Supreme Court reported in 2018 (10) GSTL 401. In view of this, there cannot be any demand of service tax on reimbursement. 16. Ld. Counsel further submitted that the show cause notice raised demand of service tax without specifying the head under which tax is being demanded. The mere reading of the show cause notice shows that the demand has been raised in cavalier manner, without relying upon any document. Such show cause notice are impossible to reply as the assessee does not know the exact charge. He referred to the judgment of the Supreme Court in the case of CCE Vs. Brindavan Beverages reported in 2007 (213) E.L.T. 487 (S.C.) wherein the Hon ble Apex Court in para 10 as observed as under:- The show cause notice is the foundation on which the department has to build up its case. If the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein below:- (a) That the Convention defined under Section 65(32) of the Finance Act, 1994 is as under;- Convention means a formal meeting or assembly which is not open to general public, but does not include a meeting or assembly, the principal purpose of which is to provide any type of amusement, entertainment or recreation. (b) Further during the impugned period, the taxable service in respect of convention had been defined in section 65(105) (zc) of the Act as under;- Service means any service provided or to be provided to a client by any person in relation to holding of convention in any manner. When we examine the definition and scope of convention and convention service provided in the Finance Act, 1994 cited (supra) then it is clear that the convention service is taxable only when it is provided to some person in relation to holding of a convention . Wherein in the present case, we find that the appellant do not provide any service to any person in relation to the holding of a convention. Further the scope of convention service has been clarified by CBEC vide letter F.No.B.11/1/2001-TRU dated 09.07.2001 Government of India, Ministry of Finance, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on the gross figures available without any supporting evidence and hence is vague and liable to be dropped and we do so accordingly. 26. Further, as far as demand of service tax of Rs. 2,64,582/- on reimbursement of electricity consumption related to business exhibition service is concerned, we find that the appellant provides business exhibition service and admittedly appropriate amount of service tax is paid on that activity. The appellant also charges reimbursement of electricity charges from the exhibitor which is sought to be taxed by the department. In this regard, it is to be noted that the demand of service tax on reimbursement of expenses has been held ultra virus by the Hon ble High Court of Delhi in the case of Inter-Continental vs. UOI 2013 (29) STR 9 (Del.). In view of this, the demand of service tax on reimbursement of electricity charges are set-aside as there is no nexus between electricity reimbursement and service provided. 27. As far as demand of service tax of Rs. 90,36,316/- on Modular Employment Scheme under Business Auxiliary Service pertaining to the period 2009-10 2010-2011, we find that the modular employment scheme is a vocational trainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were the subject matter of the order-in-original dated 29-5-2012. 17 . When we examine the Show Cause Notice, we have to take into consideration that the object and purpose is to inform the recipient of the allegations against him so that he can meet them effectively and is not prejudiced by manifestly vague notice which leaves him confused and unable to answer/reply. The assessee must be given a reasonable and real opportunity and made aware as to what he has to meet. But, the notice cannot be read as a legislative enactment which is to the point, precise and required to show exceptional lucidity. What is required to be seen is whether the allegations made have been conveyed and set forth, to enable the recipient/assessee to get an opportunity to defend himself against the charges. Notice should not suffer from obscurity and unintelligibility as to deny a fair and adequate chance to the recipient/assessee to get himself fully exonerated and avoid incidence of tax. What transpired after the notice was served, conduct of the parties thereafter, hearing given, are all factors that have to be examined to ascertain as to any prejudice was caused resulting in an arbitrary and un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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