2019 (4) TMI 184 - AT - Service Tax

Levy of service tax - Valuation - Mandap Keeper service - conference facility - demand of service tax, interest and imposition of penalties under Section 76 as well as 78 of the Finance Act, 1994 - Held that - Tribunal in the case of Hotel Amarjit Pvt. Limited 2014 (4) TMI 920 - CESTAT MUMBAI has settled the issue regarding liability of catering provided with Mandap Keeper service and held that the services rendered by the mandap keepers as a caterer would also be liable to service tax under the category of Mandap Keeper Services . In case where there is provision of stay along with food and conference facility, best judgment method can be applied to arrive at the value of conference facility, after necessary evidence is produced by the appellants. Benefit of N/N. 1/2006-ST dated 01.03.2006 - Held that - The appellant also claimed that they have availed Cenvat credit only for the period prior upto 01.03.2006 and not thereafter. In those circumstances, the benefit of Notification No. 1/2006-ST dated 01.03.2006 cannot be denied to the appellants. Penalty u/s 76 and 78 of FA - Held that - The penalty imposed under Section 76 is set-aside, wheras penalty u/s 78 upheld. Time Limitation - Held that - It is seen that the appellant had not declared the correct figures in their returns filed with the department and therefore, no benefit of limitation can be extended to the appellant. Benefit of cum-tax - Held that - In view of the settled law, the benefit of cum-tax value cannot be denied to the appellant and the demand is required to be revised on that count. The appeal is partly allowed and the matter is remanded to the original adjudicating authority for re-quantification of demand.

Summary

Issues Involved:
1. Liability of service tax under Mandap Keeper services.
2. Eligibility for cum-tax benefit and abatement.
3. Imposition of penalties under Sections 76 and 78 of the Finance Act, 1994.
4. Applicability of extended period of limitation.
5. Re-quantification of demand.

Issue-wise Detailed Analysis:

1. Liability of Service Tax under Mandap Keeper Services:
The appellants, providing taxable services under the category of Mandap Keeper services, were found liable for service tax when offering space for conferences, with or without food and lodging. The Tribunal referenced the decision in Tamil Nadu Kalyana Mandapam Assn. vs. UOI, which clarified that services rendered by mandap keepers, including catering, are taxable under Mandap Keeper Services. The Tribunal concluded that the appellant's provision of space for conferences along with catering and/or rooms is liable to tax under this category.

2. Eligibility for Cum-tax Benefit and Abatement:
The appellant argued for cum-tax benefit and abatement, claiming no separate charge for conference facilities when providing food and lodging. The Tribunal acknowledged that prior to 01.03.2006, there was no restriction on availing Cenvat credit, and abatement was permissible under Notification No. 12/2001. Post 01.03.2006, Notification No. 1/2006-ST imposed restrictions. The Tribunal agreed that the benefit of cum-tax value could not be denied as the appellant had not recovered service tax from clients, necessitating a revised demand.

3. Imposition of Penalties under Sections 76 and 78 of the Finance Act, 1994:
The appellant contended that simultaneous penalties under Sections 76 and 78 could not be imposed, referencing the Gujarat High Court decision in Raval Trading Company vs. CST. The Tribunal set aside the penalty under Section 76, adhering to this precedent.

4. Applicability of Extended Period of Limitation:
The appellant argued against the extended period of limitation, stating that all data was available in official records, implying no misstatement or suppression of facts. However, the Tribunal found that the appellant had not declared correct figures in returns filed with the department, thus denying the benefit of limitation.

5. Re-quantification of Demand:
The Tribunal directed the original adjudicating authority to re-quantify the demand, considering the appellant's eligibility for cum-tax benefit and abatement. The Tribunal emphasized the need for a best judgment method to determine the value of conference facilities when combined with food and lodging, contingent on the appellant providing necessary evidence.

Conclusion:
The appeal was partly allowed, with the matter remanded for re-quantification of the demand, considering the Tribunal's findings on cum-tax benefit, abatement, and the inapplicability of simultaneous penalties under Sections 76 and 78. The Tribunal also upheld the denial of the extended period of limitation due to the appellant's failure to declare correct figures in their returns.