Custom, Excise & Service Tax Tribunal
Sri Kalikamba Seva Samithi Represented ... vs Mysore Central Tax on 21 November, 2024
ST/20637/2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
Regional Bench COURT-2.
Service Tax Appeal No. 20637 of 2022
[Arising out of the Order-in-Appeal No. MYS-EXCUS-000-APP-SAK-
005-2022-23 dated 28.04.2022 passed by the Commissioner
(Appeals) Central Tax, Central Excise & Service Tax, Mysuru.]
M/s. Sri Kalikamba Seva Samiti
Represented By its Secretary
Sr. M. B. Srinivasa
Old M.c. Road Mandya,
Bengaluru Rural
Karnataka - 571401 .......Appellant
VERSUS
Commissioner of Central Tax,
Mysuru Commissionerate
No. S1-S2, Vinayaka Marg Sidharth Nagar,
Mysuru, Karnataka - 570011 ..... Respondent
Appearance:
Shri S. Annamalai, Advocate for Appellant Mr. P Saravana Perumal Authorized Representative for Respondent Coram:
Hon'ble P.A. Augustian, Member (Judici7al) FINAL ORDER No. 21152 of 2024 Date of Hearing: 22.05.2024 Date of Decision: 21.11.2024 Per: P.A. Augustian The Appellant is registered under the Karnataka Societies Registration Act, 1960 from 05.01.1977 onwards. However, Appellant failed to register themselves under the Service tax since they are providing taxable service namely renting of Samudhaya Bhavana and also towards renting of shops for business purposes. Page 1 of 7
ST/20637/2022 Appellant also not discharged the service tax on the legal expenses incurred under the reverse charge mechanism. Accordingly, a show cause notice dated 23.04.2020 was issued to Appellant for the period from 2014-2015 to 2017--2018 (April 2017 to June 2017). The Appellant had made detailed reply stating that the activities are exempted as per the mega Notification No. 25/2012 dated 20.06.2012. The Appellant also challenged the demand on the ground since it is barred by limitation. Though the Adjudicating authority dropped the demand against Samudhaya Bhavan, confirmed part of the demand on renting of tangible goods, on commission collected under provisions of Section 73 of the Finance Act, 1994 and on renting of immovable property with interest and appropriate charges. The Adjudicating authority also imposed penalty. Aggrieved by said order, an appeal was filed before the Commissioner (Appeals) and Commissioner (Appeals) as per the impugned order rejected the appeal. Aggrieved by said order, present appeal is filed before this Tribunal.
2. When the appeal came up for hearing, the Ld. Counsel for the Appellant draw my attention to the letter dated 14.05.2004 were the Assistant Commissioner of Central Excise has informed the Appellant that are not liable for payment of service tax. The Ld. Counsel also draw our attention to the certificate of registration issued by the Registrar of Societies in Karnataka dated 05.01.1977 and the income tax returns filed by the Appellant for the relevant period. The Ld. Counsel further submits that there is no suppression of facts with an intent to evade payment of tax and Page 2 of 7 ST/20637/2022 invoking the extended period of limitation is unsustainable. To support the same, the Ld counsel relied on following decisions :-
i. M/s Web Impression (I) (P) Ltd vs Commissioner of C.Ex, Calcutta-I (2011 21 STR 482 (Tri-Kolkata) ii. Collector of Central Excise vs M/s Triveni Sheet Glass Works Ltd (2005 (5) RC 612 (SC) iii. M/s Om Sai Professional Det. & Security Ser. P Ltd vs CCE, Guntur (2008 (12) STR 79 (Tr.Bang) iv. Commissioner of Central Excise, Mumbai vs M/s CMS Computers (P) Ltd (2005 (10) SCC 46 (SC) v. M/s R.S Travels vs Commissioner of Central Excise, Meerut (2008 (15) STT 437 (Tri- Ne Delhi) vi. M/s Kushal Fertilizers Pvt Ltd vs Commissioner of Customs & Central Excise (2009 (13) SCC 515 (SC) vii. M/s Sourav Ganguly vs Inion of India & Ors WPNo. 3137 (W) of 2013 (Calcutta)
3. As regarding the submission on merit, the Ld. Counsel for the Appellant drew my attention to the grounds of appeal and reply to show cause notice. The Ld. Counsel further submits that the chairs, Dias, idol, gas stove, generator, grinder, carpet, screen/mat are part of the premises of the Samudhaya Bhavana and consequently the entire amount collected in this regarding is exempted from levy of service tax as per Entry No.5 of mega Notification No. 25/2012 dated 20.06.2012. The Ld. Counsel further submits that it is a case of bundled service, Samudhaya Bhavan along with the chairs, Dias, Idol, gas stove, generator, grinder, carpet, screen/mat. In terms of Page 3 of 7 ST/20637/2022 Section 66F(3)(a) of the Finance Act, 1994, it seems to be a naturally bundled service, the said provision reads as - if various elements of such service are naturally bundled in the ordinary course of business, it shall be treated as provision of the single service which gives such bundle its essential character. Since the essential character of the service is exempted as per Entry No.5 of the Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 the other items referred above also form part of the said service and exempted from levy of service tax. The Ld Counsel also challenged the order of imposing penalty, since there is no suppression of facts and there is no intension for evasion of service tax.
4. The Ld Counsel also produced the judgment of Hon'ble High Court of Karnataka dated 26.07.2022 in Writ Petition (c) No. 57941/2018 where it is held that;
"14. It is not in dispute that petitioner has let out some of its buildings for canteen, Bank and other facilities which are essential for effective running of an University in furtherance to imparting education and the said activity has to be considered as an activity incidental to provide services of education and it is a service naturally bundles in the ordinary course of business as contemplated in the aforementioned Clause (3) of Section 66(F) of the Finance Act, and the rent received also deserves to be exempted once the activity of providing education by the petitioner-institution is exempted from service tax."
5. As regarding demand of Service Tax on rent, Ld counsel submits that the place is meant for general public to conduct Page 4 of 7 ST/20637/2022 religious ceremony and adjacent to temple. Tariff is only Rs 500/- and it is exepted from levy of service Tax as per Mega Exemptopm Notification No. 25/2012 dated20.06.2012 as well as substituted by notification no. 6/2014 dated 11.07.2014 vide entry No. 18.
6. Ld AR reiterated the findings in the impugned order and submits that though the Adjudication authority dropped the demand under the Mandap service, the other services rendered by the Appellant relating to commission and renting of shops are taxable and don't get coverd under any of the exemptions. To support the submission, Ld. AR relied on following decisions/ judgments: -
i. M/s Chamundi Die Cast (P) Ltd vs Commissioner of Central Excise, Bangalore (2007 (2007) Taxmann.com 428 (SC) ii. M/s Padmini Products vs Collector of Central Excise, Bangalore (1989 (1989) Taxmann.com 629 (SC) iii. Commissioner of Central Excise, Bangalore-II vs M/s ITC Ltd (2010 (257) E.L.T 514 iv. M/s Indian Farmers Fertilizers Co-operative Ltd vs Commissioner of Central Excise (2007 (6) STT 283 (Tri. New Delhi)
7. As regarding limitation, Ld AR submitted that in the matter of M/s IC Financial Analyst of India vs CC, Hyderabad (2013 (30) STR 237), it is held that;
Page 5 of 7
ST/20637/2022 "20. We have also examined the plea of limitation raised by the assessees/appellants. These appellants had not disclosed the relevant facts and materials to the department during the periods of dispute. They had not taken steps to obtain registration with the department, nor to file ST-3 returns of the fees/charges collected from the students, nor to pay service tax. It was only during the course of investigations by the department that these appellants disclosed the relevant facts and, that too, under compulsion and in a piecemeal manner. This state of affairs has been clearly brought out through the learned Special Consultant's submissions recorded in para 9(f) of this order in respect of the ICFAI cases. We have seen more or less the same state of affairs in respect of other assessees also. The show-cause notices and the relied-upon documents loudly disclose the suppression of the facts by these parties whose intent to evade payment of service tax is evident from the records. In the case of Mehta & Co. (supra), the Hon'ble Supreme Court held that the extended period of 5 years prescribed under the proviso to Section 11A(1) of the Central Excise Act (which provision is pari materia with the proviso to Section 73(1) of the Finance Act, 1994) could be reckoned from the date of acquisition of knowledge by the department. The ratio of the decision is squarely applicable to the present cases.
No final decision of this Tribunal or any High Court or the Supreme Court in support of the assessee's views with regard to "commercial training or coaching service" defined under Section 65(105)(zzc) of the Finance Act, 1994 has been shown to have existed during the period of dispute. Therefore there is no substance in their plea of "bona fide belief based on decisions".
Therefore, we hold that the proviso to Section 73(1) of the Finance Act, 1994 was rightly invoked in these cases. In any case, a major part of the demand on ISB is within the normal period and, in the case of other assessees also, a considerable part of the demand is within the normal period."
8. Heard both sides. As regarding the first issue on invoking the extended period of limitation, considering the communication made by Assistant Commissioner of Central Excise confirming that the Appellant is not liable for payment of service tax and in the absence of any allegation regarding any other service provided by appellant and without any amendment of relevant provision of law, no finding Page 6 of 7 ST/20637/2022 can be made that the Appellant who had registered under the Societies Act and filing income tax return regularly had suppressed the facts regarding service provided by them. Since the entire demand is made by invoking the extended period of limitation and no demand is falling under normal period, the demand is barred by limitation.
9. Hence the appeal is allowed as prayed.
(Order dictated and pronounced in open court on 21.11.2024) (P.A.Augustian) Member (Judicial) Sasidhar Page 7 of 7