2024 (8) TMI 1331 - AT - Service Tax

Applicability of Sr. No. 45 as as inserted on 01.04.2015 in the Mega Exemption N/N. 25/2012-ST dated 20.06.2012 - amount collected on account of vintage classic car collection w.e.f. 01.04.2015 - Department alleged that the appellant does not fall under the said entry for the reason that the space in the appellants premises for keeping the vintage car cannot be called as Museum covered under the said entry. Whether after 01.04.2015 also the appellant was still liable to pay service tax on the entry fee as the display of vintage car collection in appellant s hotel cannot be called as museum ? HELD THAT - It is the settled principle of statute interpretation that the terms which have not been defined in a statute are to be understood in their ordinary or popular sense instead of being defined in technical sense. The adjudicating authorities below have relied upon the technical definition of Museum given by ICOM statutes adopted by 22nd General Assembly in Vienna Austria on 24.08.2007. Support drawn from the decision of Hon ble Apex Court in the case of MSCO PVT. LTD. VERSUS UNION OF INDIA AND OTHERS 1984 (10) TMI 44 - SUPREME COURT wherein it has been held that while construing a word in a statute or a statutory instrument in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or the statutory instrument understand it. The Hon ble Apex Court clarified that it is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject. The said decision of Hon ble Supreme Court is sufficient to hold that the Adjudicating Authorities have committed an error while relying upon ICOM for the definition of word Museum as a building in which objects of historical etc. interest are stored or a place having an archive of objects. It is undisputed fact that the appellants were displaying historical/vintage cars in a specific earmarked area in their hotel - the amount collected as entry fee is towards admission to museum as is covered under Sr. No. 45 of the exemption notification number. The amount of entry fee is the fee collected for providing service as that of admission to the vintage car museum in the appellant s premises hence is clearly exempted unless entry no. 45 of the exemption notification. Hence the demand with respect to the amount of service tax confirmed in this appeal vis- -vis entry fee to vintage car museum the demand is held liable to be set-aside. To that extent the findings in the order under challenge are liable to be set-aside. The order under challenge of M/s Lake Palace Hotels and Motels Private Limited set aside - appeal allowed.

Summary

Issues:
- Interpretation of exemption under Notification No. 25/2012-ST for vintage car collection entry fees
- Eligibility of vintage car collection as a 'Museum' for exemption
- Cenvat credit availed on inadmissible input services

Analysis:

Issue 1: Interpretation of exemption under Notification No. 25/2012-ST for vintage car collection entry fees

The case involves two appeals concerning the payment of service tax on entry fees for vintage car collections at hotels. The appellants argued that their activity falls under the exemption provided in Entry No. 45 of Notification No. 25/2012-ST, which exempts services by way of admission to a 'Museum.' The Department contended that the vintage car display does not qualify as a museum and is a sales promotion activity for the hotel, thus attracting service tax liability.

Issue 2: Eligibility of vintage car collection as a 'Museum' for exemption

The Tribunal analyzed the definition of 'Museum' as per dictionaries, emphasizing that in the absence of a statutory definition, ordinary meaning should prevail. It rejected the technical definition provided by the International Council of Museum (ICOM) and held that the vintage car display area, charging entry fees, qualifies as a museum. The Tribunal emphasized that the exemption notification imposes no conditions for availing the exemption, and the area for vintage cars can be considered a museum for the purpose of the exemption.

Issue 3: Cenvat credit availed on inadmissible input services

In one of the appeals, the appellant was found to have wrongly availed Cenvat credit on inadmissible input services. The Tribunal upheld the reversal of Cenvat credit but set aside the demand for service tax on the vintage car collection entry fees. The other appeal saw a similar outcome, with the demand for service tax being set aside while upholding the reversal of Cenvat credit.

In conclusion, the Tribunal allowed one appeal partially and set aside the order in the other appeal, emphasizing that the vintage car collection area qualifies as a museum for the purpose of exemption under Notification No. 25/2012-ST. The Tribunal highlighted the ordinary meaning of 'Museum' and the absence of specific conditions in the exemption notification.