Case Law Details
CST Delhi Vs Perfect Realtions Ltd (CESTAT Delhi)
The respondent arranges press conferences, interviews, press release, etc. The stand of the Revenue is that such activities will fall under the category of “Event Management Services” w.e.f. 01.10.2002 and further under the BAS with effect from 01.07.2003. There is no dispute that the activities of the appellant are squarely covered within the definition of “Public Relation Services”, which was made taxable w.e.f. 01.05.2006. The stand of the respondent is that a particular service which has been newly introduced cannot be made taxable prior to the date of its introduction. In the case of M/s Indian National Ship Owners’ Association Vs Union of India-2009 (14) STR 289 (Mom,), the Hon’ble Bombay High Court has observed as follows:
“38. If the Department’s contention is accepted that would mean that the activities of the members of the 1st petitioner are covered by entry (zzzy) and entry (zzzj). Such a result is difficult to comprehend because entry (zzzzj) is not a specie of what is covered by entry (zzzy). Introduction of new entry and inclusion of certain services in that entry would presuppose that there was no earlier entry and inclusion of certain services in that entry would presupposed that there was no earlier entry covering the said services. Therefore, prior to introduction of entry (zzzz), the services rendered by the members of the Ist petitioner were not taxable. Creation of new entry is not by way of amending the earlier entry. It is not a carve out of the earlier entry. Therefore, the services rendered by the member of the Ist petitioner cannot be brought to tax under that entry.”
The said decision has also been upheld by the Supreme Court reported as 2011(21) STR 3 SC. The ld Commissioner (Appeals), in the impugned order, has also examined the facts and clearly recorded that the activity of the respondent does not fall within the categories of Event Management Service as well as Business Auxiliary Service. After carefully considering his discussions, we find no reason to interfere with the same.
FULL TEXT OF CESTAT ORDER IS AS FOLLOWS:
The appeal is filed by Revenue against Order-in-Original No.14/2011 dated 28.02.2011. The period of dispute is 01.10.2002 to 30.06.2003. The respondent is engaged in arranging press conferences, press release, interviews etc. for its commercial clients. The department was of the view that the service provided by the respondent was liable to payment of Service Tax during the dispute period. The SCN dated 24.04.2008 was issued in which payment of service tax was raised under the following categories:
i) For the period 01.10.2002 to 30.06.2003, service tax was demanded under “Event Management Service”, defined under Section 65 (40) of the Finance Act, 1994.
ii) For the period 01.07.2003 to 30.06.2006, under Business Auxiliary Service defined under 65 (105) (zzb) w.e.f. 01.05.2006.
2. With effect from 01.05.2006, a new taxable category “Public Relation Services” was introduced under Section 65(105) (zzzs). The respondent admitted his liability for payment of Service Tax w.e.f. 01.05.2006 under this category. The further dispute for the period 01.07.2003 to 31.03.2006 is that Service Tax was demanded by including various “out of pocket expenses” recovered by the respondent from the recipient of service. The ld Commissioner (Appeals), vide the impugned order, dropped the demand of Service Tax. Revenue is in appeal against this order.
3. With the above background, we heard Shri Amresh Jain, ld DR for Revenue and Shri A.K.Batra, CA as well as Ms Vibha Narang, Advocate for the respondednt. The ld DR argued that the activities of the respondent are, no doubt, covered by the Public Relations Services w.e.f. 01.05.2006. Further, for the period prior to this, the activities are covered by the services of Event Management as well as Business Auxiliary Services. This is clear from the definitions. Hence, he submitted that the demand for the prior period may be upheld.
4. The ld Consultant argued that it is settled position of law that a particular service cannot be made taxable prior to the date of its introduction. In this connection, he relied on the following case laws:
(i) Indian National Shipowners’ Association Vs Union of India dated 23.03.2009 cited as 2009 (14) STR 289 (Bom.)
(ii) CRISIL Ltd Vs CCE, Thane dated 18.05.2016 cited as 2016-TIOL-2643- CESTAT-MUM
2. Diebold Systems (P) Ltd Vs CST, Chennai dated 28.11.2007 cited as 2008 (9) STR 546 (Tri.-Chennai)
5. He also submitted that the respondent already started paying Service Tax under BAS w.e.f. 01.07.2003.
6. We have heard both sides and perused the record. The respondent arranges press conferences, interviews, press release, etc. The stand of the Revenue is that such activities will fall under the category of “Event Management Services” w.e.f. 01.10.2002 and further under the BAS with effect from 01.07.2003. There is no dispute that the activities of the appellant are squarely covered within the definition of “Public Relation Services”, which was made taxable w.e.f. 01.05.2006. The stand of the respondent is that a particular service which has been newly introduced cannot be made taxable prior to the date of its introduction. In the case of M/s Indian National Ship Owners’ Association Vs Union of India-2009 (14) STR 289 (Mom,), the Hon’ble Bombay High Court has observed as follows:
“38. If the Department’s contention is accepted that would mean that the activities of the members of the 1st petitioner are covered by entry (zzzy) and entry (zzzj). Such a result is difficult to comprehend because entry (zzzzj) is not a specie of what is covered by entry (zzzy). Introduction of new entry and inclusion of certain services in that entry would presuppose that there was no earlier entry and inclusion of certain services in that entry would presupposed that there was no earlier entry covering the said services. Therefore, prior to introduction of entry (zzzz), the services rendered by the members of the Ist petitioner were not taxable. Creation of new entry is not by way of amending the earlier entry. It is not a carve out of the earlier entry. Therefore, the services rendered by the member of the Ist petitioner cannot be brought to tax under that entry.”
7. The said decision has also been upheld by the Supreme Court reported as 2011(21) STR 3 SC. The ld Commissioner (Appeals), in the impugned order, has also examined the facts and clearly recorded that the activity of the respondent does not fall within the categories of Event Management Service as well as Business Auxiliary Service. After carefully considering his discussions, we find no reason to interfere with the same. These are upheld for the reason mentioned therein.
8. In the light of above, the appeal filed by Revenue is dismissed.
(Pronounced in Court on 26.02.2018)
