2025-VIL-2115-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax – Sections 65(108) and 73(1) of Finance Act, 1994 – Payment of technical meeting charges – Demand of tax – Appellant is engaged in printing and packaging business – Appellant made outward remittances in foreign currency towards annual membership fees to International Packaging Group (IPG) & International Packaging Forum Network (IPFN) and pre-shipment inspection fees to Intertek – Department issued show cause notices proposing recovery of service tax by alleging that above payments constituted taxable imported services – Adjudicating Authority confirmed demands as proposed in show cause notice – Whether annual membership/participation fees paid in foreign currency to IPG and IFPN are exigible to service tax – HELD – Appellant had paid participation fees and technical meeting charges to IPG/IFPN for attending periodic technical meetings held outside India. There was no evidence that IPG/IFPN have rendered any services to Appellant and condition of relationship of service recipient with service provider is absent. Services provided by a club or association to its own members remain outside ambit of service tax. Demand confirmed in respect of payments made by Appellant to IPG/IFPN is set aside – Appeals partly allowed - Payment of participation fees – Tax liability – Whether participation fees paid to British Safety Council for participating in sword of honour contest held abroad are exigible to service tax under the Act – HELD – Sword of Honour is an award scheme available to organisations that have achieved a five-star rating in their Five Star Occupational Health and Safety Audit. There is no evidence on record that during years of participation in contest, either Appellant have been awarded the honour in contest to show that services were imported into India. Transaction is an overseas contest/award adjudication performed outside India and does not fall within any taxable entry. Demand on this score is unsustainable and is set aside - Pre-shipment inspection charges – Demand of tax – Whether pre-shipment inspection charges paid to Intertek International Ltd. U.K. are exigible to service tax – HELD – Engagement between Appellant and Intertek emanates from a commercial contract, under which, Appellant obtained certification for its import consignments in order to facilitate acceptance of goods in importing country. Inspection and certification were performed by a private agency for a consideration. Activity bears the essential character of a technical inspection and certification service as understood in Section 65(108) of the Act. Payments made to Intertek attract service tax under category of Technical Inspection and Certification Service on a reverse charge basis. Demand confirmed in respect of pre-shipment inspection charges paid to Intertek is upheld - Invoking of extended period of limitation – Whether invocation of extended period of limitation is justified in facts and circumstances of case – HELD – Proviso to Section 73(1) of the Act substitutes ordinary one year limitation by a longer period, where short-payment arises by reason of fraud, collusion or any wilful mis-statement or suppression of facts with intent to evade payment of tax. Alleged non-payment came to light only pursuant to departmental audit and investigation. Appellant did not voluntarily disclose the disputed transactions nor did it place the relevant facts before Department at any earlier point. Appellant had not pleaded a bona fide legal doubt on taxability of transactions. Invocation of extended period of limitation is legally tenable. Appellant will be liable to pay tax for extended period together with interest.
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