Confederation Of Indian Industry Vs Commissioner of Central Excise & Service Tax (CESTAT Chandigarh)
CESTAT Chandigarh held that the modular employment scheme is a vocational training programme and vocational training activity is outside the ambit of service tax, as exempted vide Notification No. 24/2004-ST dated 10.09.2004.
Facts- During the course of audit it was observed that the appellant was providing the services under the category of convention services but had started paying service tax on the same from 16.05.2008 only whereas the service tax on the said services was leviable from 16.07.2001. The appellant started paying service tax from 16.05.2008 only when the words ‘client’ was substituted with ‘any person’.
It was alleged that the appellant 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.
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 the period 16.05.2008 to 31.03.2009 and the service tax involved on differential amount of Rs. 1,88,35,080/- comes to Rs. 22,70,068/- as on 31.03.2009.
Further the appellant intimated vide their letter dated 27.09.2010 that they had received an amount of Rs. 9,98,67,855/- under Modular Employment Scheme during the period 2009-10 and 2010-11 (upto August 2010). Out of Rs. 9,98,67,855/- they had paid service tax on an amount of Rs. 1,21,11,697/- and they had not paid service tax on an amount of Rs. 8,77,56,158/- during the period 2009-10 and 201011 (upto August 2010).
Conclusion- Held that the conventions organized by the appellant is open to general public and any person interested in the subject matter of the convention can participate in the convention by paying a ‘delegate fee’. 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.
Held that the demand of service tax on reimbursement of electricity charges are set-aside as there is no nexus between electricity reimbursement and service provided.
Held that the modular employment scheme is a vocational training programme, administered by Ministry of Labour, Government of India. The assessing activity done by the appellant is part of the vocational training activity exempted vide Notification No. 24/2004-ST dated 10.09.2004 and later exempted from service tax vide Notification No. 23/2010-ST dated 29.04.2010.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 30.04.2012 passed by the Commissioner of Central Excise and Service Tax, Chandigarh whereby the Ld. Commissioner has confirmed the demand of service tax of Rs. 2,30,78,277/- under Section 73(1) of the Finance Act along with interest under Section 75 of the Finance Act and also imposed equal penalty under Section 78 of the Finance Act. The Commissioner has also imposed penalty of Rs. 5000/- under Section 77 of the Finance Act.
2. Briefly the facts of the case are that the appellant are engaged in providing Mandap Keeper Services, exhibition Services, Management consultancy Services, Sponsorship Services, club or Association Services, Advertising Services & Convention Services specified under section 65(105) of the Finance Act, 1994 (hereinafter referred to as the Act). The appellant opted for centralized Registration being a Northern Region Head Quarter and the permission was granted for the same by the Commissioner on 24.02.2005 for the Mandap Keeper Service, Exhibition Services & Management Consultancy services etc. Further after addition of few more new services, the Centralized registration was granted by the Commissioner on 16.12.2008.
3. During the course of audit it was observed that the appellant was providing the services under the category of convention services but had started paying service tax on the same from 16.05.2008 only whereas the service tax on the said services was leviable from 16.07.2001.
4. The appellant started paying service tax from 16.05.2008 only when the words ‘client’ was substituted with ‘any person’. The appellant was providing this service to various firms/companies engaged in the manufacturing activities or providing services on payment of duty/taxes. Any person who was sponsored by such firms or the representative of the firm or any person who required any specific expertise/advice relating to the subject matter of that convention were the participants of such conventions. Thus, the appellant 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 the period 16.05.2008 to 31.03.2009 and the service tax involved on differential amount of Rs. 1,88,35,080/- comes to Rs. 22,70,068/- as on 31.03.2009. Further the appellant intimated vide their letter dated 27.09.2010 that they had received an amount of Rs. 9,98,67,855/- under Modular Employment Scheme during the period 2009-10 and 2010-11 (upto August 2010). Out of Rs. 9,98,67,855/- they had paid service tax on an amount of Rs. 1,21,11,697/- and they had not paid service tax on an amount of Rs. 8,77,56,158/- during the period 2009-10 and 201011 (upto August 2010). As such the appellant had not paid service tax on the total differential amount of Rs. 10,65,91,238/- to the tune of Rs. 1,13,06,384/- which appeared to be recoverable from them along with interest. Further, during audit it was observed that the appellant was providing service under Business Exhibition Services and on reconciliation of figures as reflected in ST-3 returns and as shown in the balance sheets for the year 2005-06 to 2008-09, difference of Rs. 2,43,17,676/- was found. As per the balance sheet the appellant had shown the receipt of Rs. 15,18,93,982/- and as per ST-3 returns they had shown the assessable value as Rs. 12,75,76,306/-. The service tax on differential amount of Rs. 2,43,17,676/- come to Rs. 27,76,582/- which appeared to be recoverable along with interest from the appellant.
6. Apart from the above, the appellant also received the payment during the period from 2005-06 to 2010-11 as detailed below:
