2008 (12) TMI 69 - AT - Service Tax

Mandap keeper High tea high tea is a concept associated with early evening meal so exemption is admissible to high tea provided by Mandap keeper service tax not paid on services relating to formal meetings and conferences under the category of Convention service which was subsequently introduced impugned order holding that appellant should have paid tax after classifying the services is sustainable since matter involves different interpretations, larger period not invocable

Summary

Issues Involved:
1. Liability to pay service tax on convention services if already registered as a Mandap Keeper.
2. Eligibility for exemption/abatement when food is provided by the Mandap Keeper.
3. Applicability of the extended time limit and penalties imposed.

Detailed Analysis:

1. Liability to Pay Service Tax on Convention Services:
The primary issue was whether the appellants, already registered as Mandap Keepers and paying service tax under that category, were also liable to pay service tax for convention services. The appellants argued that based on a CBEC clarification, they were not required to pay service tax again under the category of convention services if they were already paying as Mandap Keepers. However, the tribunal found that while the CBEC letter did clarify that service tax should not be charged twice for the same service, it did not grant the liberty to classify services under either category at will. The tribunal upheld the Commissioner's order, stating that the appellants should have classified services appropriately and discharged service tax under the correct category.

2. Eligibility for Exemption/Abatement When Food is Provided:
The second issue was whether breakfast and high tea provided by the Mandap Keeper could be considered as "substantial and satisfying meals" to qualify for exemption under Notification No. 21/97-ST and 12/2001-ST. The Commissioner had observed that snacks, high tea, and breakfast did not fulfill the condition of providing a substantial and satisfying meal. However, the tribunal noted that a heavy breakfast with several items could be considered a meal, but high tea in the Indian context was not. The tribunal remanded the matter to the Original Adjudicating Authority to verify if the breakfast provided met the conditions of the notification.

3. Applicability of Extended Time Limit and Penalties:
The tribunal considered whether the extended time limit for demand and the penalties imposed were justified. It was noted that the Original Adjudicating Authority had accepted the appellants' interpretation based on a CBEC letter, indicating a bona fide belief that service tax on convention services was not required if paid under Mandap Keeper services. The tribunal concluded that two interpretations were possible until further clarification in 2003, thus the invocation of the extended period and penalties could not be upheld. The matter was remanded to determine the quantum of duty within the standard limitation period, allowing the appellants to re-classify services if desired.

Conclusion:
1. Demand Limitation: The demand is limited to the standard period without invoking the extended period.
2. Re-classification Opportunity: Appellants are given an opportunity to re-classify services within the limitation period.
3. Exemption Verification: The Original Adjudicating Authority must verify if the food provided qualifies as a substantial meal.
4. Penalties: All penalties imposed on the appellants are set aside.

Separate Judgment:
Member (Judicial):
- Agreed with the need to pay service tax for convention services within the limitation period.
- Disagreed with the Commissioner's view on high tea not being a substantial meal, holding that high tea should be considered as such for exemption purposes.
- Set aside the part of the order denying exemption and allowed the appeal on this issue.

Final Agreement:
- Both members agreed that high tea should be considered a substantial meal, eliminating the need for remand on this aspect.

Pronouncement:
The judgment was pronounced on 18-12-2008.