2015 (7) TMI 822 - HC - Service Tax

Demand of service tax from Officer Incharge of the Magh Mela at Allahabad - Mandap Keeper Service - Held that - Definition of Mandap Keeper and Mandap makes it apparently clear that the petitioner does not come under this definition clause. The petitioner is a Pandal or Shamiyana contractor providing services in connection with the preparation, arrangement, erection or decoration of a Pandal or Shamiyana. Further, we find, that Mandap keeper is for organization of any social, official or business function. However, the Department has issued a clarification dated 17.9.2004 which provides that Pandal or Shamiyana keepers will not be liable for Service Tax, if they provide services for purely religious ceremony and congregation. Definition of Mela it is clear that services provided by a Shamiyana and Pandal contractor for a religious fair or congregation in the Mela area at Allahabad would be covered under the Circular dated 17.9.2004. In the instant case the tender invited by the Mela Officer was for the purpose of erection of temporary tents etc. in the Mela area during the Magh Mela season for the year 2004-05. Since the supply of the tents by the petitioner was for a religious congregation, which was held in the Mela area at Allahabad, the respondent No.1 was not liable to pay the Service Tax to the petitioner - Decided against Petitioner.

Summary

Issues:
1. Liability of the Mela Officer to pay Service Tax to the petitioner for services provided.
2. Interpretation of relevant provisions of the Finance Act, 1994 regarding Pandal or Shamiyana contractors.
3. Application of circular dated 17.9.2004 exempting Service Tax for religious ceremonies.
4. Determining the classification of the petitioner as a Mandap Keeper for Service Tax liability.
5. Analysis of the United Provinces Mela Act, 1938 in relation to the services provided by the petitioner.

Analysis:
1. The petitioner, a partnership firm, contended that the Mela Officer was liable to pay Service Tax based on an agreement for supply of tents. The Mela Officer refused payment citing a circular exempting Service Tax for religious ceremonies. The Central Excise Department also issued a demand notice to the petitioner for Service Tax payment.

2. The Finance Act, 1994 defines Pandal or Shamiyana contractors as those providing services related to official, social, or business functions. The Act mandates Service Tax payment by such contractors. However, a circular dated 17.9.2004 clarified that services for pure religious ceremonies are exempt from Service Tax.

3. The circular specifically exempts Pandal or Shamiyana services for religious purposes from Service Tax. The petitioner's services for a religious congregation during the Magh Mela season fell under this exemption, relieving the Mela Officer from paying Service Tax.

4. The Central Excise Department argued that the petitioner should be classified as a Mandap Keeper, thus liable for Service Tax. However, the definition of a Mandap Keeper under the Finance Act did not apply to the petitioner, who was a Pandal or Shamiyana contractor.

5. The United Provinces Mela Act, 1938 defined Mela as religious gatherings in the Mela area at Allahabad. Services provided by the petitioner for the Magh Mela season in the Mela area were considered exempt from Service Tax under the circular.

In conclusion, the High Court dismissed the writ petition, stating that the Mela Officer was not liable to pay Service Tax to the petitioner for services provided during the Magh Mela season. The judgment highlighted the exemption for Pandal or Shamiyana services related to religious ceremonies, as per the circular, and clarified the petitioner's classification as a contractor, not a Mandap Keeper, for Service Tax purposes.