Custom, Excise & Service Tax Tribunal
M/S. Jaipur Jewellery Show vs C.C.E. & S.T. Jaipur-I on 25 November, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Appeal No. ST/603/2011-CU(DB)
[Arising out of Order-in-Appeal No. 60(DKV)ST/JPR-I/2011 dated 18.02.2011, by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur].
For approval and signature:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Honble Shri V. Padmanabhan, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Jaipur Jewellery Show. .Applicants
Vs.
C.C.E. & S.T. Jaipur-I .Respondent
Appearance:
Ms. Rinki Arora, Advocate for the Applicants Shri Ranjan Khanna, DR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) Date of Hearing: 02.11.2016 Date of Pronouncement:__25/11/2016_ FINAL ORDER NO. 55555 /2016-CU(DB) Per Archana Wadhwa:
As per the f acts on record the appellant is engaged in providing business auxiliary services, business exhibition services and business support services. For the said purpose they are duly registered with service tax department and discharging their service tax liability.
2. The dispute in the present appeal relates to the valuation of the services provided under Business Exhibition Services. For providing the said services the appellant is arranging for the booths, which are being booked by its customers. Some of the customers, after booking the booths, proceed for cancellation of the same. For cancelling the booth already booked by their customers, the booking amount is being refunded to them after deducting certain cancellation charges. The dispute relates to the said cancellation charges retained by the appellant. Whereas the appellants contention is that such charges have no nexus with the services provided by them under business exhibition services in as much as no service was provided, the Revenue is of the view that since the booths were pre booked by the customers and were subsequently cancelled, the cancellation charges retained by the assessee are liable to service tax under business exhibition services.
3. The second issue relates to the penalties imposed and recovered by the appellant from their customers where they have violated the booth sizes and have enhanced the height of the booths. Service tax stand confirmed against them by observing that such penalty charged by the appellant for violation of the booth size is nothing but the value of the services provided by them.
4. In view of the above, proceedings were initiated against the appellant, by invoking longer period of limitation, which culminated into orders passed by the lower authorities. It may be mentioned here that another issue of sale of raffle tickets by the appellant is not being agitated before us.
5. We have heard Ms. Rinki Arora, Advocate for the Applicants and Shri Ranjan Khanna, DR for the Respondent.
6. As regards the cancellation charges, we note that the same are being retained by the appellant from the initial amounts given to them for booking a booth, when the same is subsequently cancelled by the customer and the amount is refunded to them. Admitted position, which emerges is, that no booths are ultimately rented out by the appellant to their customers. As explained, such cancellation charges are for putting the appellant into inconvenience by initially booking the booths and subsequently cancelled. In as much as no service stand provided by the appellant to their customers and for which purpose no consideration was ever received by them, we are of the view that the cancellation charges recovered by the appellant cannot be held to be the consideration for providing business exhibition services. The same are thus not liable to service tax.
7. As regards the penal charges recovered by the appellant from the booth size violators it stand explained to us by the Ld. Advocate that the appellant, while providing the business exhibition services, rent out booths of a particular size. In some cases, the occupant of the booth increases the size of the booth in height. Admittedly, the said variations results in increasing the size of the booth for which purpose the appellant receives some amount from the booth occupant naming the same as penalty. In as much as the said extra amount received by the appellant is in connection with the size of the booth provided by them to its customers, the inevitable conclusion is that the same is for the extra space availed by the customer. As such, by whatever name the said amount is called, the same is nothing but a consideration for the extra space of the booth and as such has to be held as the value of the services, thus liable to service tax.
8. However, we find that the appellants were issued a show cause notice dated 02.03.2009 for the period 10.09.2004-31.03.2007, by invoking the longer period of limitation. The said show cause notice clearly mentions that it was during the course of checking of the financial records including their balance sheet, which reflects upon the fact of charging of excess amount from the service recipient. There is no dispute that the said charging of penalty stands reflected in the appellants Balance Sheet.
The appellants have contended that in as much as the entire facts were reflected by them in the Balance Sheet, which is nothing but a public document, suppression of such information cannot be alleged against them so as to call for invocation of extended period of limitation. Reliance in this regard is placed upon the Tribunals decision in the case of Kirloskar Oil Engines Ltd. Vs. CCE Nasik 2004 (178) ELT 998 (Tri Mum) as also to the decision in the case of Hindalco Industries Ltd. Vs. CCE Allahabad 2003 (161) ELT 346 (Tri Del).
Though we find that the ratio of above decisions laying down that when information stands provided by the assessee in the balance sheets no malafide can be attributed to the assessee so as to justifiably invoke the longer period of limitation, we also note that the issue involved is interpretation of the provisions of law. In the absence of any positive evidence produced by the Revenue to show that the penalty amount recovered by the appellant from the booth violators was not being made leviable to tax on account of any malafide, we find no justifiable reasons to invoke the longer period of limitation. As such we hold that in as much as the entire demand is beyond the normal period of limitation, same is hit by the bar of limitation and is not sustainable.
9. In view of the above, we set aside the impugned orders confirming service tax, interest and imposition of penalty and allow the appeal with consequential relief to the appellant.
[Pronounced in the open Court on _25/11/2016__]
(V. Padmanabhan) (Archana Wadhwa)
Member (Technical) Member (Judicial)
Bhanu
2
ST/578/2012-CU(DB)