Krishna Industrial & Agricultural Exhibition Society vs Commissioner Of Central Tax Guntur

A.K. Jyotishi, Member (T)

M/s The Krishna Industrial & Agricultural Exhibition Society, herein after referred to as Appellant, are conducting Business Exhibition Service and are also registered with the Service Tax department. The appellants were collecting hire charges for providing stalls to other business exhibitors such as Deepavali stalls, Lepakshi Craft bazaar stalls, who conducts business exhibition elsewhere, under caption ‘Syma stalls’. They are also receiving electricity charges from stall holders and paying the same to the electricity department. They are also providing Autonagar sheds (function hall) for rent to the persons who conduct functions in such halls and collecting rent from them.

The department issued a SCN dt.04.06.2010 demanding an amount of Rs.3,62,265/- as service tax on the amount of Rs.30,20,242/- collected towards electricity charges, Syma stall maintenance charges, Deepavali stall maintenance charges, Lepakshi craft bazaar and stalls registration fee during the period 01.04.2008 to 31.03.2009 under the category of “Business Exhibition Service”. They also demanded an amount of Rs.9,727/- as service tax on the amount of Rs.82,913/- collected towards Autonagar sheds I & II maintenance charges and electricity charges, etc., during the period 01.04.2008 to 31.03.2009 under the category of “Mandap Keeper Service”.

On adjudication, the Original Authority considered the activities undertaken by the appellant as nothing but providing of service to business exhibitors, in relation to business exhibition and such activity as ‘organizer of business exhibition’ was covered under taxable service under Sec 65(105)(zzo). With regard to the provision of sheds at Autonagar for functions of marriage and/or reception as also collection of certain amounts towards maintenance and electricity charges, the Adjudicating Authority considered them as squarely falling under ‘Mandap Keeper services’. Thereafter, the SCN was confirmed in full and also penalty was imposed under Sec 76, Sec 77 and fine under Sec 70 of the Finance Act, 1994.

Being aggrieved, the appellant filed an appeal before the Commissioner (Appeals), who, vide OIA dt.12.01.2012, dismissed the appeal at admission stage itself for non-compliance of mandatory Pre-deposit. Appellants have approached this Tribunal against the said OIA dt.12.01.2012 in Appeal No.ST/828/2012.

Subsequently, on the similar issue, another SCN dt.14.10.2014 was issued to the appellant for the period from April, 2009 to March, 2013. The department was of the view that certain activities of the appellant, in relation to conducting business exhibition, are nothing but providing of service to business exhibitors, in relation to business exhibition and therefore, rightly classifiable under the head ‘business exhibition’ under Sec 65(105((zzo). In addition they found that appellants were also providing other services like ‘Mandap Keeper service’ etc. On adjudication, the Adjudicating Authority, after going through the records and submissions of the appellant, came to the conclusion that they had provided ‘business exhibition services’, ‘mandap keeper services’, ‘supply of tangible goods services’, ‘transport of goods by road services’ and ‘legal services’; and accordingly, confirmed the total demand of Rs.11,01,941/-. The appellant filed an appeal before the Commissioner (Appeals), who, vide OIA dt.30.10.2015, again dismissed the appeal at the admission stage itself for non-compliance of mandatory Pre-deposit. The appellant is in appeal against the said OIA dt.30.10.2015 in Appeal No.ST/30029/2016.

Learned Consultant for the Appellant has made certain submissions, wherein, he is contesting that during the period 2009-2013, they had not conducted any business exhibition services during Diwali period and that the license holders to sell the diwali crackers were under the licenses issued by the Vijayawada Municipal Corporation and Andhra Pradesh Fire Service department, who erected stalls in the grounds allotted to them vide tenders and that they were not in any way connected with the said activity. In fact, they contended that they had supplied only iron rods, bamboo panels and GI Sheets for erection of stalls for few vendors, which would come under ‘supply of tangible goods service’ for which they have already paid service tax of Rs.61,872/- and interest thereon. The appellant had filed an Affidavit informing that they have already paid service tax under the OIO No.02/2015-16 dt.28.04.2015 under the following heads except under ‘business exhibition service’ and that they are not contesting the same.

i) Mandap keeper service - Rs.76,852/-

ii) Supply of tangible goods service – Rs.61,872/-

iii) Transport of goods by road service – Rs.20,231/-

iv) Legal services – Rs.9,438/-

They have also paid interest amounting to Rs.2,33,932/- on 07.02.2024 as stated in the Affidavit. They have also relied on the judgment in the case of Karnataka Exhibition Authority vs CC, CE & ST, Mysore [2018 (7) TMI 1672 (CESTAT-Bangalore)] in support of their claim that they are not providing business exhibition service. The Tribunal held that merely leasing of stalls and renting will not fall under the category of business exhibition service. We find that the activities covered in the said judgment are almost identical to the activities in the present case, which are being classified under ‘Business Exhibition services’.

Learned AR for Revenue reiterates the findings and observations of the Adjudicating Authority.

Heard the parties and perused the records. Since both the appeals cover identical issues, they are taken up together.

We find that the appellants are engaged in various activities and the department, based on their documents like ledgers, etc., considered certain services as falling under certain specific headings and therefore, liable to service tax. In so far as the ‘business exhibition service’ is concerned, the Original Authority has not given substantive grounds to cover their activities and has not effectively rebutted their submissions. On the other hand, the judgment cited by the appellant supra, which covers almost identical activities clearly holds that such activities would not fall under ‘business exhibition services’. Therefore, we hold that demand in both the appeals under the category ‘business exhibition service’ is not sustainable and accordingly, demand to that extent is set aside.

In so far as the demand on electricity charges is concerned, it appears that they were being collected on actual basis and being submitted to the electricity department and therefore, the same cannot be liable to service tax and therefore, the demand to that extent is also set aside. In respect of Appeal No.ST/828/2012, the demand for electricity charges is not sustainable. Since, we have already held that in view of the judgment of the Tribunal (supra), these activities cannot be considered as ‘business exhibition service’, therefore, the demand of Rs.3,62,265/- is not sustainable and we set aside the same in full. However, the demand on ‘Mandap Keeper service’ amounting to Rs.9,727/-is upheld as he has already accepted the demand on services other than ‘Business Exhibition service’.

Further, in view of the facts of the case and lack of substantive grounds to establish any deliberate attempt to evade service tax, the penalty under Sec. 76, 77 and Fine under Sec 70 are also set aside.

Therefore, in view of the above, we pass the following order:

(a) In respect of Appeal No.ST/828/2012, the part demand is set aside and the appeal is allowed partly.

(b) In respect of Appeal No.ST/30092/2016, the demand for the category of ‘business exhibition service’ is set aside, while the demand for other services viz., ‘mandap keeper service’, ‘supply of tangible goods service’, ‘transport of goods by road service’ and ‘legal services’, is upheld. Therefore, the appeal is allowed in part.