The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh has held that conventions open to the general public cannot be classified as “Convention Service” under Service Tax laws and as a result, service tax is not applicable to such conventions.
The issue arose from an appeal filed by M/s. Confederation of Indian Industry against an order-in-original passed by the Commissioner of Central Excise and Service Tax, Chandigarh, confirming a demand for service tax along with penalties and interest.
The appellant assessee was engaged in providing various services, including Mandap Keeper Services, Exhibition Services, Management Consultancy Services, Sponsorship Services, Club or Association Services, Advertising Services, and Convention Services.
The appellant, represented by Shri Rajesh Kumar argued that they did not provide any service to any person “in relation to holding a convention” and therefore, service tax was not applicable.
The respondent revenue, Commissioner of Central Excise & Service Tax, represented by Ms. Shivani contended that the appellant is liable to pay service tax on convention services from 18.04.2006 to 15.05.2008 as per the Finance Act, 1994.
The CESTAT examined the definition of “convention” and “convention service” during the relevant period, as per the Finance Act, 1994.
It was observed that convention services were taxable only when provided to some person “in relation to holding of a convention”.
In the present case, the appellant organised conventions that were open to the general public and anyone interested in the subject matter could participate by paying a delegate fee.
Since the conventions were open to the general public, they did not fall within the ambit of “convention service” under the service tax law and as a result, no demand of service tax could be raised on convention services provided by the appellant, the bench held.
The bench also held that the demand based on balance sheet figures, electricity consumption reimbursement, and Modular Employment Scheme was not sustainable and the substantial demand of service tax was barred by limitation. Consequently, penalties for non-payment of service tax are not applicable in this case.
In conclusion, the two-member bench consisting of Mr. S. S. Garg (Judicial Member) and Mr. P. Anjani Kumar (Technical Member) allowed the appeal, setting aside the order and ruled that conventions open to the general public are not subject to “Convention Service” under Service Tax laws and hence service tax does not apply to such conventions organised by the appellant.
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