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2018 (12) TMI 168 - AT - Service TaxClassification of services - Mandap Keeper Service or otherwise - charges recovered by the appellant for letting out of the auditorium - time limitation - Held that - An identical issue has come up before the Bombay Bench of this Tribunal in the case of Gadkari Rangayatan 2014 (12) TMI 544 - CESTAT MUMBAI , where reliance placed in the case decision of Tribunal in the case of Secretary, Town Hall Committee 2007 (6) TMI 504 - CESTAT BANGALORE where it was held that cultural functions are also social functions and renting out the hall for cultural functions would attract Service Tax liability - thus, the appellant will be liable to payment of service tax. Time Limitation - Penalty - Held that - No malafide intention to evade payment of service tax can be attributed to the appellant - non-payment of service tax is only as an omission on the part of the appellant - demand restricted to the normal period of limitation along with interest under Section 75 of the Finance Act, 1994 - penalty also set aside for same reason by invoking section 80. Appeal allowed in part.
Issues involved:
1. Liability of service tax on charges for letting out an auditorium for cultural performances. 2. Applicability of "Mandap Keeper Service" under Section 65(67) of the Finance Act, 1994. 3. Interpretation of the term "social function" in the context of cultural events. 4. Determination of the period for duty demand confirmation and intention to evade payment of service tax. 5. Imposition of penalties under Sections 76 and 78 of the Finance Act, 1994. Detailed analysis: 1. The appeal concerned the liability of service tax on charges for letting out an auditorium for cultural performances. The appellant's auditorium was rented for drama and rehearsals to amateur theater groups, and the lower authorities held the charges liable for service tax under the category of "Mandap Keeper Service" as per Section 65(67) of the Finance Act, 1994. The demand of service tax, interest, and penalties were confirmed against the appellant, leading to the challenge in the present appeal. 2. The interpretation of "Mandap Keeper Service" under Section 65(67) was crucial in determining the service tax liability. The Tribunal referred to previous case laws to establish that renting out an auditorium for cultural functions falls within the definition of "Mandap Keeper Service." The Tribunal cited the definition of Mandap and the explanation of social functions, emphasizing that cultural events are considered social functions, thereby attracting service tax liability. 3. The term "social function" was analyzed in the context of cultural events to determine the scope of Mandap Keeper Service. The Tribunal held that cultural functions, including dance and drama, are subsets of social functions. It was established that renting out a hall for cultural events would indeed attract service tax liability based on previous decisions and the comprehensive interpretation of social functions. 4. The Tribunal deliberated on the period for duty demand confirmation and the intention to evade payment of service tax. It was noted that in cases involving Government bodies, there is usually no mala fide intention to evade payment of service tax. Therefore, penalties and the extended period of time for confirming duty demand were not applicable in such instances, as seen in previous judgments. 5. Considering the facts and circumstances of the case, the Tribunal concluded that while the appellant was liable to pay service tax for renting out the auditorium, there was no malafide intention to evade payment. As a result, the demand was restricted to the normal period of limitation, and all penalties under Section 80 of the Finance Act, 1994, were waived. The appeal was partly allowed based on these considerations.
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