2003 (11) TMI 1 - AT - Service Tax

Service Tax Mandap Keeper (1) Meaning of mandap keeper (2) The carrying of stalls for as such business it is normal business activity not a business ceremony (3) rental receipts from participants

Summary

Issues Involved:
1. Whether the stalls rented out by ITPO fall under the category of 'mandap'.
2. Whether trade fairs constitute "official, social or business functions" as per Section 65 of the Finance Act, 1994.
3. Whether the rental receipts from the Election Commission for storing ballot boxes and counting votes fall under the taxable service provided by a mandap keeper.

Issue-wise Detailed Analysis:

1. Whether the stalls rented out by ITPO fall under the category of 'mandap':
- The appellant contended that its stalls do not fall in the category of 'mandap'. However, the tribunal did not delve into this issue as the decision on the second contention was sufficient to dispose of the appeal.

2. Whether trade fairs constitute "official, social or business functions" as per Section 65 of the Finance Act, 1994:
- The appellant argued that the definition of "mandap keeper" under Section 65(23) of the Finance Act, 1994, makes a clear distinction between 'functions' organized and the normal work of organizations. The appellant emphasized that the term "function" implies an impressive, elaborate, or formal ceremony, contrasting with the day-to-day carrying out of official work, social activities, or business. The Revenue contended that the terms 'business' and 'function' are interchangeable and that "business function" would mean functions/activities related to business.
- The tribunal held that the term "function" used in the definition cannot be equated with "activity." The context in which the word is used in Section 65 suggests that it refers to a ceremony. The tribunal concluded that trade fairs are temporary markets and not ceremonies. Therefore, the use of ITPO stalls for trade fairs was for business as such, and not for a ceremony.

3. Whether the rental receipts from the Election Commission for storing ballot boxes and counting votes fall under the taxable service provided by a mandap keeper:
- The tribunal noted that the Election Commission carries out its official work of conducting elections, which includes making arrangements for voting, storing ballot boxes, and counting ballots. These activities are essential parts of the official work of the Election Commission and are not ceremonies. The tribunal emphasized that renting out premises for such official activities does not fall under the definition of "mandap keeper" as it does not involve organizing a function or ceremony.
- The tribunal concluded that the interpretation sought by the Revenue was contrary to the scheme of the service tax on mandap keepers. The definition limits the levy to temporarily organized official, social, or business functions or ceremonies. Therefore, the rental receipts from the Election Commission and participants in trade fairs do not fall under the taxable service provided by a mandap keeper.

Conclusion:
- The tribunal set aside the service tax demand made on ITPO with regard to rental receipts from participants in trade fairs and the Election Commission. It held that ITPO was not functioning as a mandap keeper allowing temporary use of the mandap "for organizing any official, social or business function." Consequently, the interest and penalty also failed. The appeal was allowed, and the impugned order was set aside.