2014 (12) TMI 544 - AT - Service Tax

Mandap Keeper Services - Auditorium rented out for conducting drama performance and other cultural entertainments - Assessee contends that such activity cannot come under purview of Mandap Keeper Service - Whether they are liable to service tax under the category of Mandap Keeper Services during the period from 1998-99 to 2004-05 - Held that - Tribunal in the case of Secretary, Town Hall Committee 2007 (6) TMI 504 - CESTAT BANGALORE has held that cultural functions are also social functions and renting out the hall for cultural functions would attract Service Tax liability. The said decision of the Tribunal was also upheld by the Hon ble High Court of Karnataka reported in 2011 (4) TMI 191 - KARNATAKA HIGH COURT . This Tribunal also followed the ratio of the said decision in the case of Manager, Ravindra Kalakshetra (2007 (10) TMI 208 - CESTAT, BANGALORE) and also in the case of Surat Municipal Corporation v. Commissioner of Central Excise, Surat reported in 2006 (2) TMI 45 - CESTAT, NEW DELHI . Thus, we are of the considered view that the activity undertaken by the appellant in the present case would get squarely covered under the category of Mandap Keeper Services and the appellants are liable to pay Service Tax on the said activity accordingly. In the case of Statutory/Government bodies, there can be no mala fide intention to evade payment of Service Tax and it can be considered only as an omission on the part of the appellants and, therefore, there is no need to impose any penalty and invoke any extended period of time - demand of Service Tax can be upheld only for the normal period of limitation and not for the extended period. The adjudicating authority is directed to re-compute the duty demand for the normal period of limitation and intimate the same to the appellants for payment. The appellant would also be liable to pay interest on the recomputed demand in terms of Section 75 of the Finance Act, 1994. - there cannot be any mala fide intention on the part of the appellant being a Government body and, therefore, we set aside the penalties imposed on the appellants under Section 80 of the Finance Act, 1994 - Decided partly in favour of assessee.

Summary

Issues:
1. Liability of service tax under "Mandap Keeper Services" for renting out an auditorium for cultural events.
2. Applicability of extended period for confirming duty demand and intention to evade payment of service tax.

Analysis:
1. The appeal involved the liability of M/s. Gadkari Rangayatan, Thane, for service tax under "Mandap Keeper Services" due to renting out their auditorium for cultural events. The Commissioner of Central Excise (Appeals) upheld the service tax demand, penalties, and interest imposed on the appellant. The appellant argued that cultural events are not official, social, or business functions, hence not liable for service tax. However, the Revenue contended that cultural events fall under the broad definition of "social function" in Mandap Keeper Services, citing precedents where renting out premises for cultural events attracted service tax.

2. The Tribunal analyzed the definition of Mandap Keeper service under Section 65(105)(m) and Mandap under Section 65(66) of the Finance Act, 1994. It considered the precedent set by the Tribunal and the High Court, stating that cultural events are part of social functions, thus falling under the ambit of Mandap Keeper Services. The Tribunal held that renting out the auditorium for cultural functions attracts service tax liability, following the established legal interpretation.

3. Regarding the extended period for confirming duty demand and intention to evade payment of service tax, the Tribunal referred to previous cases involving Government bodies. It noted that for Government bodies like the appellant, there is no mala fide intention to evade service tax payment. Therefore, penalties and the extended period for duty demand were not applicable. The Tribunal directed the re-computation of duty demand for the normal limitation period and upheld the payment of interest on the recomputed demand.

4. In conclusion, the Tribunal disposed of the appeal by confirming the liability of the appellant for service tax under Mandap Keeper Services for renting out the auditorium for cultural events. It set aside penalties imposed on the appellant due to the absence of mala fide intention, as it was a Government body. The decision highlighted the legal interpretation of social functions encompassing cultural events under the service tax regime.