Case Law Details
M/s. Karnataka Exhibition Authority Vs C.C.,C.E.& S.T (CESTAT Bangalore)
Karnataka Exhibition Authority had leased out the land having stalls, by way of tender”. We are of the considered view that leasing stalls and land will not fall under the category of „business exhibition services‟as held by the Revisionary Authority. The learned Departmental Representative has relied upon the case of Tamil Nadu Tourism Development Corporation Ltd. cited supra; however, this was only an interim order in respect of the pre-deposit and not a final finding. Going by the facts of the case and by the ratio of the judgments cited by the appellants, we find that the activity undertaken by the appellants is not taxable under „business exhibition services‟; at the most, they could have been charged for tax for promoting commercial use or exhibition of any event organized by a person or organization which was taxable only w.e.f. 01.07.2010.
The Bangalore bench of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) has held that leasing stalls and land will not fall under the category of “business exhibition services” under the Finance Act, 1994.
In the instant case, the appellants, M/s. Karnataka Exhibition Authority, Mysore have given rights to others to lease out stalls, during the course of Annual Dusshera Exhibition, Mysore Palace by the way of calling tenders. The department demanded service Tax from the appellant by alleging that the said activity amount to service under Business Exhibition Service.
The appellants contended that they have not provided any exhibition service or for that matter, any service to the exhibitors even in case, it is found that some services provided to the exhibitors. According to them, it was only by the tenderers but not by the appellants. The services of promoting the commercial use or exhibition of any event organized by a person or organization is brought under tax net w.e.f. 01.07.2010, they argued.
Allowing the appeal, the Tribunal recalled it order while deciding the pre-deposit as observed that in the entire proceedings “it is to be noted that the Karnataka Exhibition Authority had leased out the land having stalls, by way of tender”.
“We are of the considered view that leasing stalls and land will not fall under the category of “business exhibition services” as held by the Revisionary Authority. The learned Departmental Representative has relied upon the case of Tamil Nadu Tourism Development Corporation Ltd. cited supra; however, this was only an interim order in respect of the pre-deposit and not a final finding. Going by the facts of the case and by the ratio of the judgments cited by the appellants, we find that the activity undertaken by the appellants is not taxable under “business exhibition services”; at the most, they could have been charged for tax for promoting commercial use or exhibition of any event organized by a person or organization which was taxable only w.e.f. 01.07.2010,”the bench said.
FULL TEXT OF THE CESTAT JUDGMENT
M/s. Karnataka Exhibition Authority, Mysore (the appellants) have given rights to others to lease out stalls, during the course of Annual Dusshera Exhibition, Mysore Palace by the way of calling tenders. The highest bidder was given the right to lease out stalls. The Revenue has issued a SCN dated 16.05.2006 alleging that they have rendered service under Business Exhibition Service in terms of Section 65 (19A) of the Finance Act, 1994. The Joint Commissioner of Customs vide Order No. 36/2006 dated 30.08.2007 has dropped the proceedings holding that in terms of Memorandum of Association of KEA of the appellants; the exhibition was to project and to propagate the Cultural and Literary heritage and technological achievements and the educational and sociological advancement in the State and that there was no business in the objective of the appellants. The Commissioner of Service Tax, Mysore has issued a Revision Order in terms of Section 84 of the Finance Act, 1994 holding that the OIO issued was not legal and correct. The said revisional SCN was adjudicated by the Commissioner vide Order-in-Revision dated 04.12.2008. Hence this appeal.
2. The appellants have submitted that they are a society created by Government of Karnataka to conduct annual culture show during Dusshera. They have floated tenders providing for the collection of entry fee, to promote conduct of cultural shows and to establish stalls. The OIO passed by the Joint Commissioner has correctly observed the objections of KEA and dropped the proceedings; however, the Commissioner has improved upon the SCN by adding certain points to the original SCN which is not permissible as per law. The issue is time-barred; their aim was only to propagate the culture of Karnataka and for not to promote any business. They have not provided any exhibition service or for that matter, any service to the exhibitors even in case, it is found that some services provided to the exhibitors; it was only by the tenderers but not by the appellants. The services of promoting commercial use or exhibition of any event organized by a person or organization is brought under tax net w.e.f. 01.07.2010. Therefore, during the said period, no liability of tax falls on them. They relied upon the following cases:
(i) Royal Western India Turf Club Ltd Vs. CST, Mumbai- 2015 (38) STR 811 (Tri. Mumbai).
(ii) Markfed O1 & Allied Industries Vs. CCE, Chandigarh- 2006 (3) STR 70 (Tri. Del).
(iii) Sands Hotel Pvt. Ltd. Vs. CST, Mumbai- 2009 (16) STR 329 (Tri. Mumbai).
3. The learned AR has submitted that one need not go only by the objectives; what is important is the reality of the appellants providing services, in fact, the appellants have provided stalls to the exhibitors through a middleman; therefore they have performed some activity in relation to marketing of the products; therefore, they are liable to pay Service Tax on the same. The learned AR has brought to the notice of this Bench that Chennai Bench of the Tribunal in the case of Tamil Nadu Tourism Development Corporation Ltd. 2012 (25) 84 has held that activity of allotting the stalls to small traders and artisans to market, promote and showcase their own production in addition of showcasing of the achievements of the client, prima facie, Business Exhibition Service.
4. Heard both the sides and perused the records of the case.
5. The brief issue to be decided in this case is whether allowing the contractor to lease or rent stalls for exhibition is taxable under „business exhibition services‟ and whether the Revenue proceedings have been gone beyond the scope of the original SCN. Coming to the issue of the Revenue proceedings, the contention of the appellants was that the original SCN did not invoke extended period whereas the revision SCN has invoked it. We find that the original SCN has mentioned that the appellants suppressed the facts of rendering taxable service with intent to evade payment of Service Tax and they fail to declare their taxable turnover to the Department. The revision SCN has only expanded the reasons for invoking extended period; since original SCN made mention of extended period, we are not inclined to accept the contentions of the appellants.
6. Coming to the issue of taxability of the service rendered by the appellants, we find that as brought out in the original SCN, it is evident from the Memorandum of Association that the appellants are a registered society constituted with the object of organizing exhibitions; it is also evident from the letter of Sh. D.T. Prakash that the appellants provides for security and maintenance of the entire area provides for an amusement park; invites the dignitaries to declare the exhibition open to the public; invites Government departments to put up stalls, organizes cultural programmes etc. The moot point would be whether such invitation would amount to marketing or promotion of business; understandly what is undertaken by the appellants is promoting the tenderers viz. D.D. Prakash to allow creation and leasing out the stalls for use by different business entities, including some Government departments. The main objective of the “Cultural Dusshera Exhibition” is to propagate and project the Cultural and Literary heritage and technical achievements and educational and sociological advancement in the State. The bidder of the tender would let out the allotted area or stalls to the interested people who wish to put up their stalls. The stalls are used to put up shops for selling their products; taxable service requires that the Service Tax should be provided to the exhibitor. In the instant case, we don‟t find any such service rendered by the appellants to the exhibitor, in fact, the successful tenderer will give it to individual shops, the service receiver as well as the appellants are concerned, is the tenderer but not the individual exhibitors of the shops.
7. We find that this Bench vide order dated 24.09.2009 in ST/50/09 while deciding the pre-deposit as observed that in the entire proceedings “it is to be noted that the Karnataka Exhibition Authority had leased out the land having stalls, by way of tender”. We are of the considered view that leasing stalls and land will not fall under the category of „business exhibition services‟as held by the Revisionary Authority. The learned Departmental Representative has relied upon the case of Tamil Nadu Tourism Development Corporation Ltd. cited supra; however, this was only an interim order in respect of the pre-deposit and not a final finding. Going by the facts of the case and by the ratio of the judgments cited by the appellants, we find that the activity undertaken by the appellants is not taxable under „business exhibition services‟; at the most, they could have been charged for tax for promoting commercial use or exhibition of any event organized by a person or organization which was taxable only w.e.f. 01.07.2010. As we find that the appeals sustain on merits, the question of charging interest and levying penalty could not survive.
8. In view of the above, the appeals are allowed with consequential relief, if any.
(Operative portion of the Order was pronounced in Open Court on 24/07/2018)
