MGF Event Management Vs CCE (CESTAT Delhi)
We cannot accept the appellant‘s plea that huge parking space area was given to the appellant without any agreement with respect to financial consideration or without an agreement with respect to contingent liabilities with respect to theft, injuries, fire or other liabilities. It is difficult to believe that such an enormous responsibility was given without any Even otherwise, the activity of the appellant is covered within the definition of ‘management, maintenance or repairs’. It is not necessary that the service recipient, which are the mall owners in this case should receive any pecuniary consideration from the service. Even a service without any direct pecuniary benefit to the service recipient is also a service. Even if we take that the interest of the mall owners is that the appellant should provide a hassle free parking, it is a service to the mall owners by the appellant. Again, the plea of the appellant that no monetary consideration is being paid by the mall owners is without substance. The appellant has been allowed to use space and collected parking fee. This is a valid consideration in terms of the service tax provisions as it is not necessary that the consideration should always be directly in the form of money. If the consideration is in terms of some benefit to the service provider which can be measured or converted into money it will constitute a valid consideration.
Section 67(1)(i) clearly stipulates that where the consideration is not wholly or partly consisting of money, it would be such amount in money as, with the addition of service tax charged, is equivalent to the consideration. Further, in Section 67(1)(i) consideration has be taken as the gross amount charged by the service provider. Thus, there is no doubt that the right to collect parking fees given by the mall owners is nothing but a consideration provided to the appellant by the mall owners and the measure of such consideration is the gross income generated through the parking fees.
We further find that the learned Counsel for the appellant has sought to repudiate the liability on the impugned activity by contending that they are merely operating the parking area which is different from the service of ‘management maintenance and repairs‘. We are not inclined to accept this distinction because as far as the business activity is concerned qua the appellant, it is operation of the parking area but when this activity is examined qua the mall owners they are providing the service of ‘management, maintenance or repairs‘ to the mall owners.
We also find that the case laws cited by the appellant are not relevant in the light of these findings. However, we accept the additional plea of the learned Counsel of the appellant that such gross income will include service tax also and the taxable income has to be computed after abating the amount of service tax from the gross income in terms of Section 67(2) of the Finance Act. Therefore, the income shown in the balance sheet as parking fees will be considered as cum-tax value for determination of service tax. We also accept the argument of the learned Counsel of the appellant that they will be eligible to avail the Cenvat credit of the service tax paid on input services, which have been provided to the appellant by third party agency or any other service providers in providing the said service of ‘management, maintenance and repairs‘ of the parking area.
However, we cannot accept the plea of the appellant that no extended period was invokable as there was no wilful suppression of facts on their part as they were submitting regular service tax returns to the department. We find that there was a clear mis-declaration and wilful suppression in as much as the appellant has suppressed the income of parking fees in the relevant returns with an ulterior motive to evade the service tax. They have wilfully designed their mode of operation to evade the service tax. As such we find that the extended period is invokable in the case.
In view of entire above discussion we uphold the order-in original so far as legality of levy of service tax on the activity under management, maintenance or repair service‘ is concerned. However, the appellant will be entitled to avail Cenvat credit of service tax paid by the service providers and cum duty benefit. The penalties under Section 78 of Finance Act, 1994 need to reworked accordingly.
FULL TEXT OF THE CESTAT JUDGEMENT
The present appeal has been filed against the impugned Order-in-Original whereby the learned Commissioner has confirmed service tax demand of Rs. 2,47,31,755/- besides demanding interest and imposing penalties under different Sections 25, Section 78 of the Finance Act, 1994 respectively, arising out from three show cause notices, the details of which are given below: –
