No Service Tax on Overseas Exhibitions Facilitated for Members: CESTAT

The Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has set aside a service tax demand of Rs. 1.81 crore imposed on the Confederation of Indian Industry (CII) in relation to overseas business exhibitions, holding that the industry body merely facilitated participation of its members and did not act as an “organizer” under the Finance Act, 1994. The bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has relied on the Supreme Court’s ruling in State of West Bengal v. Calcutta Club Limited, the bench observed that services rendered by a club or association to its own members do not constitute taxable services due to the absence of a distinct service provider-recipient relationship. The dispute originated from two show cause notices issued in 2008 and 2009 alleging non-payment and short-payment of service tax by CII under the category of “Business Exhibition Service.” The matter had earlier reached CESTAT, which in 2016 remanded the case for fresh adjudication in light of earlier judicial precedents. In the de novo proceedings, the Commissioner confirmed Rs. 1,81,25,408 as service tax on overseas business exhibitions, Rs. 11,90,389 (including ₹47,822) as short payment based on balance sheet figures, interest and penalties equivalent to the tax demands. Aggrieved, CII once again approached the Tribunal. At the heart of the matter was whether CII qualified as an “organizer” of business exhibitions abroad, thereby attracting service tax under Section 65(105)(zzo) of the Finance Act, 1994. CII argued that it merely purchased space in overseas exhibitions organized by third parties and facilitated participation of its members. It did not organize the events itself. The Tribunal agreed, observing that no evidence had been produced by the department to establish an organizer-exhibitor relationship between CII and its members. The bench noted that the definition of taxable service required a distinct organizer-exhibitor relationship. In the absence of such a relationship, the levy could not be sustained. Recognizing CII as a non-profit, industry-led organization with thousands of direct and indirect members, the Tribunal concluded that the fees collected for facilitating overseas exhibition participation amounted to “self-service” within a mutual framework and were not exigible to service tax. Accordingly, the ₹1.81 crore demand and the corresponding penalty were set aside. On the second issue concerning a demand of approximately ₹11.42 lakh (plus ₹47,822) based on differences between ST-3 returns and balance sheet figures, the Tribunal adopted a different approach. CII contended that during the relevant period (prior to 2011), service tax was payable on a cash receipt basis, whereas its balance sheet was prepared on an accrual (mercantile) basis, leading to discrepancies. It also argued that part of the demand overlapped with an earlier adjudicated period. However, the Tribunal observed that CII had not produced sufficient documentary evidence before it to substantiate the claim that service tax had been correctly discharged on a cash basis. Consequently, the bench remanded this limited issue to the adjudicating authority for fresh consideration, directing that adequate opportunity be given to CII to produce relevant records and reconciliations. The Tribunal set aside the service tax demand of ₹1.81 crore on overseas exhibitions, quashed the related penalty, remanded the balance sheet-based demand for fresh adjudication, partly allowed the appeal. Case Details Case Title:Confederation of Indian Industry Versus Commissioner, CGST, Delhi East Citation: JURISHOUR-94-CESTAT-2026(Del) Case No.: Service Tax Appeal No. 50606 Of 2021 Date: 24.02.2026 Counsel For Appellant: Arun Kumar Singh, Advocate Counsel For Respondent: Aejaz Ahmad, Authorized Representative Click Here To Read Order Read More: Ancestral Property Not Immune From PMLA Attachment: Delhi High Court

No Service Tax on Overseas Exhibitions Facilitated for Members: CESTAT

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No Service Tax on Overseas Exhibitions Facilitated for Members: CESTAT

Membership Required

Latest articles

Verification Reports Must Be Shared Before Adjudication: Bombay High Court Quashes GST Order Against Pidilite

GST Penalty For Wrongful ITC Claims Can’t Be Imposed on Company Employees: Bombay HC

Average Sale Price Can’t Be Basis for Alleging Undervaluation: CESTAT

Service Tax Demand on Electricity Distribution Utility Quashed; CESTAT Holds Ancillary Services Exempt

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GST Penalty For Wrongful ITC Claims Can’t Be Imposed on Company Employees: Bombay HC

Average Sale Price Can’t Be Basis for Alleging Undervaluation: CESTAT

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