2007 (7) TMI 139 - AT - Service Tax

Event Management Service Yoga Shivir held by charitable institution No evidence to show that appellant carried out a commercial activity Revenue allegation that money has been realized in relation to event management is not proved Tax cannot be demanded on tickets by an arbitrary assessment

Summary

Issues:
Whether money collected as Event Manager is taxable under Finance Act, 1994 and if the first Appellate Authority was justified in setting aside the order of adjudication.

Analysis:
The appeal questioned the taxability of money collected as Event Manager by Mahabir International under the Finance Act, 1994, and the validity of the first Appellate Authority's decision. The Appellant argued that the event management service provided fell within the scope defined by Section 65(105)(zu) of the Finance Act, 1994, making it liable to service tax. On the other hand, the Respondents, a charitable trust, contended that their activities, such as organizing a Yoga Shibir conducted by Swami Ram Dev, did not constitute event management services and were exempt from tax due to their charitable nature. They emphasized that the money collected was solely for charitable purposes and not for commercial services, hence not subject to service tax.

Upon examination, the Tribunal found that the Revenue failed to provide evidence supporting the claim that the trust received Rs. 2.50 crores from Divya Yog Mandir Trust related to event management services. The absence of proof of any commercial activity or receipt of gross value from event management led to the conclusion that the trust could not be taxed based on arbitrary assessments. The Tribunal upheld the first Appellate Authority's decision, noting that the reasoned order did not warrant any intervention. Consequently, the Revenue's appeal was dismissed, affirming the charitable nature of the trust's activities and the exemption from service tax.

The judgment, pronounced on 25-7-2007, clarified the tax treatment of funds collected by Mahabir International as an Event Manager, emphasizing the importance of evidence and the charitable nature of the trust's activities in determining tax liability under the Finance Act, 1994.