MAHESH SUNNY ENTERPRISES PVT. LTD. Vs. CST, DELHI

JUDGEMENT

(1.) THESE are two appeals one filed by M/s. Mahesh Sunny Enterprises Pvt. Ltd. (hereinafter referred to as appellant/assessee) and second filed by Revenue against the same Order -in -Original No. 40/VKG/2008 dated 29.04.2008 passed by the Commissioner Service Tax, Delhi. Brief facts of the case are that appellant/assessee was engaged in the management of cars/scooter parking facilities at Indira Gandhi International Airport, New Delhi. The activities of the assessee according to the Department, were taxable service with effect from 10.09.2004. Accordingly the investigation were taken up by the Department and during the investigation it was revealed that appellant has entered into a Licence Agreement dated 07.11.2003 with Airports Authority of India (AAI) for management of computerized car parking facilities at various locations of International Cargo Complex, IGI Airport, New Delhi and other agreement dated 01.06.2004 was made between the appellant/assessee and Airport Authority of India for management of car parking facilities at Jaipur. According to the Department providing the cars parking facility is covered under Airport Service as defined under Section 65(105)(zzm) of the Finance Act, and accordingly Show Cause Notice was issued on 24.12.2007 by Commissioner Service Tax, Delhi demanding the Service Tax amounting to Rs. 1,93,55,142/ - along interest and also proposing penalties under Section 76, 77 and 78 of the Finance Act. The said Show Cause Notice was confirmed by the Commissioner vide impugned order under which he confirmed the Service Tax amount of Rs. 1,93,55,142/ - along with interest against the appellant/assessee. However, the Commissioner did not impose any penalty under Section 76, 77 and 78 of the Finance Act, on the assessee. The assessee has challenged the impugned order in the present appeal against the confirmation of demand of Service Tax along with interest on them and Revenue has challenged impugned order for non -imposition of penalties by the Commissioner under Section 76, 77 and 78 of the Finance Act.

(2.) LD . Advocate appearing for the assessee submits that appellant has filed Writ -Petition in Delhi High Court challenging the present Show Cause Notice. However, Hon'ble Delhi High Court vide interim order dated 07.04.2008 directed the adjudicating authority to pass the orders on the Show Cause Notice and their writ -petition is still pending in the Delhi High Court. He submits that they are not contesting levy of Service tax on merits, and their contention is that demand is time barred as Show Cause Notice has been issued on 24.12.2007, demanding the service tax for the period 10.09.2004 to 31.03.2006. He submits that adjudicating authority has also observed that appellant/assessee was in communication with Airport authority of India seeking permission to collect service tax. He submits after a long correspondence with Airport Authority of India, the Authority intimated the appellant to collect the service tax vide their letter dated 01.03.2006. He further submits that the appellant was not authorised to collect the service tax prior to this intimation dated 01.03.2006. He further submits that the appellant was working on behalf of Airport Authority of India and as such was not a service provider. He therefore submits that in view of the facts and circumstances of the case there was no intention on part of the appellant to evade or not to pay the service tax and appellant was authorised to collect the service tax with effect from 01.03.2006 only. Therefore there is no suppression of fact or any mistake on their behalf and extended period is not applicable. He further points out that Commissioner in impugned order has upheld the extended period but did not impose any penalty which further shows that extended period is not applicable in the present case.

(3.) AFTER hearing both the sides, we find that assessee is engaged in providing the taxable Airport Service with effect from 10.09.2004 to 31.03.2006 and has received the consideration for services on which the service tax has been demanded by the Department. We find that Airport Services has been brought into service tax net with effect from 10.09.2004 and under Section 65(105)(zzm) of the Act the taxable services means: "any service provided to any person by Airports Authority or any person authorized by it in an airport or a civil enclave." There is no dispute about the fact that the assessee has entered into an agreement with the Airport Authority for providing the cars/scooter parking facilities in various areas in the Airport. After examining the various provisions of the agreement between AAI and the assessee and also the various taxable provisions of the Finance Act the Commissioner has concluded that services related to managing the parking facilities at Airports to the passengers as well as to the visitors is fully covered under the taxable Airport Service as defined under Section 65(105)(zzm) and accordingly he held that demand of Rs. 1,93,55,142/ - is payable by the assessee. We find that appellant has not challenged the levy of service tax on the parking facilities and they have challenged the order on the ground of invocation of extended period of limitation under section 73(1) of the Finance Act, on the ground that the appellants/assessee was in communication with the Airport Authority seeking clarification whether service tax is required to be collected by them from customers and it is also the contention of the assessee that since the penalty has not been imposed on assessee there is no case of invocation of extended period of limitation. We find that the Commissioner has observed that assessee had never disclosed the material fact of providing such taxable services and was charging consideration from the service recipients throughout the period 10.09.2004 and 31.03.2006. Assessee had not paid the service tax to the Government account at the prescribed time during the disputed period. These actions on part of assessee amount to suppression of material fact from the Department and assessee had contravened the provisions of the Finance Act, with intention to evade the payment of service tax and therefore the extended period limitation has rightly been invoked by the Commissioner in the present case. We therefore do not find any substance in contention of the assessee and reject the appeal filed by the appellant/assessee.