Custom, Excise & Service Tax Tribunal
Tamilnadu Tourism Development … vs Commissioner Of Service Tax, … on 29 January, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH, CHENNAI Appeal No. ST/631/2009 (Arising out of Order-in-Appeal No. 60/2009 (MST) dated 18.9.2009 passed by the Commissioner of Central Excise (Appeals), Chennai) Tamilnadu Tourism Development Corporation Ltd. Appellant Vs. Commissioner of Service Tax, Chennai Respondent
Shri C. Subramanian, Advocate for the Appellant
Shri R.Subramaniyan, AC (AC) for the Respondent
Honble Ms. Sulekha Beevi C.S., Member (Judicial)
Honble Shri B. Ravichandran, Member (Technical)
Date of Hearing / Decision: 29.01.2018
Final Order No. 40220 / 2018
Per B. Ravichandran,
The appellant is a Government of Tamilnadu undertaking engaged in promoting tourism in Tamilnadu. As part of their activity, they are conducting India Tourist and Industrial Fair every year. The fair is organized and managed by the appellant. There is an entry fee for the fair. The fair is opened for many weeks, had pavilions and stalls put up by various Government Departments, autonomous bodies and traders. Apart from these, there are other amusement and entertainment activities also carried out inside the fair grounds. The present proceedings are for the demand and recovery of service tax from the appellant on the pavilion / stall rent collected by them. The original authority confirmed the service tax liability holding that the appellant rendered taxable service under the category Business Exhibition Service under section 65(19a) of the Finance Act, 1994.
2. The ld. counsel appearing for the appellant contested the demand on various grounds. First of all, he submitted that the appellants are not engaged in the business promotion by conducting such exhibition. Most of the stalls are put by the Government departments or bodies to publicize and also to propagate policy initiatives of the Government and also to propagate public interest messages regarding health, welfare etc. These are governmental activities and cannot be considered as marketing, promoting or show casing any business or services. These are part of public services carried out by the sovereign Government authority. Regarding stalls and pavilions put up by traders and private business entities, it is submitted, there also there is no involvement of the appellant in any commercial activity. The ld. counsel strongly contested the demand for extended period stating that the appellant is a Government undertaking and has no malafide intention to evade any tax. Further, there is a bonafide belief that the appellant is mainly coordinating the propagation of Government policies in providing space for setting up pavilions of Government departments.
3. The ld. AR submitted that the appellant did provide pavilion and stalls for rent and organized the fair with controlled access. Such activity is directly promoting the service / product of the participants who put up the pavilion or stall. The activity is squarely covered by the tax entry. The appellant did not disclose the fact to the department and did not get themselves registered to discharge service. Accordingly, he supported the finding on limitation.
4. We have heard both sides and perused the appeal records.
5. Admittedly, the appellant organized the trade fair which is titled as Tourist and Industrial Fair. We note that the lower authorities confirmed the service tax liability on the rental income in respect of the exhibitors / stalls inside the fair. It is clear that large number of stalls / pavilions were put up by the Government departments like Ministry of Health, Family Welfare, Civil Supplies, Agriculture etc. As claimed by the appellant, these pavilions / stalls are not in furtherance in business or commerce of the Government. These are basically for propagation of public policy and also for increasing the awareness of the public in various vital areas like health, family welfare, civil supplies, agriculture etc. These are essentially sovereign governmental activities. As such, we hold that the income attributable to such stalls and the pavilions accruing to the appellant cannot be covered by tax entry Business Exhibition Service.
6. Admittedly, there were various pavilions and stalls put up by commercial entities which promoted their service or product to the public. These are squarely covered by the tax entry. We note that the appellant also claimed certain income as attributable to providing space for parking for visitors which is not covered by the said tax entry. Similarly, certain amusement facilities provided inside the trade fair, though by private parties, cannot be brought under the category Business Exhibition Service. These are more than in a nature of amusement and entertainment. We note that these aspects have not been examined with required analysis by the lower authorities. It is to be noted that some of these aspects have not been argued in correct perspective by the appellant also. As such we find that the impugned order as it stands cannot be sustained. Accordingly, the same is set aside. The matter is remanded back to the original authority for a fresh consideration keeping in view the above observation by us.
7. The demand was contested on limitation also. Based on facts as observed above, we note that there is a case of bonafide belief on the part of the appellant who is Government of Tamilnadu undertaking regarding non-taxability of the activity. In fact, the original authority himself waived the penalty invoking the provisions of section 80, with this reason. As such, we note that a case for misrepresentation or suppression of facts etc. cannot be sustained against the appellant during the denovo decision. As per the above direction, the original authority shall restrict the demand within the normal period wherever applicable.
8. With the above direction, the appeal is allowed by way of remand to the original authority.
(Dictated and pronounced in open court) (B. RAVICHANDRAN) (SULEKHA BEEVI C.S.) Member (Technical) Member (Judicial) Rex 5