ST - When a person takes part in an activity with reference to his expertise, he is no more part of general public - workshops organized by appellant taxable under Convention service: CESTAT
By TIOL News Service
NEW DELHI, NOV 20, 2017: THE appellants, an autonomous institute fully funded by the Government of India, are engaged in, mainly, management education. They also conducted various conferences, seminars and workshops to discuss various important subject matters in various fields and topics.
Considering these activities liable to service tax under the category of convention services, proceedings were initiated against the appellant to demand and recover service tax for the period 1.4.2005 to 24.02.2009.
The Original Authority dropped the proceedings holding that for the period 2004-05 to 2005-06, the tax liability was not tenable as the appellants cannot be considered as "commercial concern" and for the remaining period, it was held that the appellants are not holding any "convention" as defined under Section 65(32) of the Act.
In Revenue appeal, the Commissioner (Appeals) set aside the o-in-o and held that the appellants are liable to pay service tax of Rs.2,37,813/- and imposed penalties u/s 76, 77 of FA, 1994.
The appellants are before the CESTAT and submitted that they are conducting various conferences, seminars which are open togeneral public and these cannot be taxed under "convention services" as per the statutory definition. The demand was also contested on the ground of limitation.
The AR supported the impugned order.
The Bench observed -
On Merits:
+ The dispute is as to whether the conferences and seminars organized by the appellant for which they received considerations from the participants are open to the general public.
+ Section 65(32) of the Act defined "Convention" -"convention" means a formal meeting or assembly which is not open to the general public, but does not include a meeting or assembly, the principal purpose of which is to provide any type of amusement, entertainment or recreation".
+ The Original Authority proceeded to record that all individuals and groups connected with field of specialization are amongst the public and hence, the activities go outside the scope of "convention service".
+ The Commissioner (Appeals) examined the various accepted/dictionary meaning of the terms "general public" and thereafter, arrived at the findings with reference to the scope of activities undertaken by the appellant. He also quoted, illustratively, the scope of certain conferences organized by the appellant.
+ Admittedly, any person of a specialized group is also a part of general public for other purpose. In a general way, all persons, in given situation, are part of "general public". However, when a person takes part in a activity with reference to his expertise, skill, etc. he is no more a part of general public and becomes a part of a select group or recognized group of public with certain common basis.
+ In these aspects, we are not in agreement with the plea of the appellant that the conferences, seminars and workshops organized by the appellant are meant for or open to general public. The analysis and reasoning in the impugned order is more close to the statutory definition for the tax entry. As such, on merit, we are in agreement with the impugned order.
Limitation:
+ The impugned order while examining the liability of the appellant for penalty under Section 78, held that there is no mens rea behind the non-payment of service tax on the part of the appellant. That being so, we find that the ingredients for invoking extended period for demand is absent in the present case.
The tax liability was restricted to the normal period of limitation. The penalty imposed on the appellants was set aside.
The appeal was partly allowed.
(See 2017-TIOL-4065-CESTAT-DEL)
