2011 (3) TMI 640 - AT - Service Tax

Demand - Mandap Keeper - Time barred - Suppression of facts - Held that any services provided by the assessee to their client in relation to Mandap Keeper is also to be included in the services of a Mandap Keeper - It is admitted by the appellants that due to rush of vehicle the problem of parking is assuming utmost importance and the appellants who holds a banquet hall has to provide some parking space to be used for parking of vehicles by the guests of the client holding a function in the banquet hall - The appellants have suppressed the fact from the department that these car parking charges are collected from the clients who are using the Mandap - Demand of duty and interest upheld. - Penalty u/s 68 will be 25% if demand deposited within 30 days else the same will be 100% of duty.

Summary

Issues:
Appeal against demand of Service Tax for Mandap Keeper services and parking charges.

Analysis:
1. The appellants contested the demand of Service Tax on parking charges collected from clients using Mandap services. The appellant argued that separate invoices for parking charges were issued and reflected in the balance sheet, with a significant portion of the demand being time-barred. The appellant relied on precedents to argue against penalties, citing cases like Merwara Estates Vs. CCE, Jaipur and Martin & Harris Laboratories Ltd. Vs. CCE, Gurgaon.

2. The Department contended that parking space was integral to enjoying Mandap services, and as the charges were collected from Mandap clients, the extended period and penalties were justified due to alleged suppression of facts. The Department emphasized that the charges were not levied on general car parkers but on clients using the Mandap services.

3. The Tribunal analyzed the definition of taxable services under the Finance Act, noting that services related to Mandap Keeper activities included facilities provided to clients. The Tribunal found that the car parking service was directly linked to Mandap use, contrary to the appellant's argument that it was a separate service. The Tribunal distinguished the case cited by the appellant, Merwara Estates, highlighting the necessity of car parking for Mandap use.

4. The Tribunal concluded that the appellants had not disclosed the collection of parking charges from Mandap clients, justifying the invocation of the extended period. Regarding penalties, the Tribunal followed precedent and provided the appellants with the option to pay 25% of the penalty within 30 days, as per the decision in K.P. Pouches (P) Ltd. Vs. UOI.

5. Ultimately, the Tribunal upheld the demands for Service Tax on parking charges related to Mandap Keeper services, confirming interest and imposing penalties under Section 78. The appellants were given the option to pay the entire demand with interest and 25% of the penalty within 30 days to avoid further penalties. Failure to comply would result in a 100% penalty on the confirmed Service Tax demands.