2013 (6) TMI 561 - AT - Service Tax

Classification - Mandap Keeper - Split of the charges - hall charges and supply of food - levy of service tax - Held that - From the above decision of the hon ble apex Court in the case of Tamil Nadu Kalyana Mandapam Assn 2004 (4) TMI 1 - SUPREME COURT OF INDIA , it is clear that the services rendered by the mandap keepers as caterer would also be liable to service tax under the category of Mandap Keeper Services . The decision relied upon by the consultant on the hon ble High Court of Karnataka 2011 (4) TMI 451 - KARNATAKA HIGH COURT is with reference to Outdoor Catering Services rendered in an aeroplane and the other decision of the Tribunal in the case of Daspalla Hotels Ltd 2009 (7) TMI 551 - CESTAT, BANGALORE it is in respect of evidence relied upon by the appellant with regard to VAT paid on the value of food and beverages sought to be taxed under Convention Services . Appellant has not made out a case for 100% waiver of pre-deposit of the dues adjudged against him. - demand for the normal period of limitation directed to be deposited - stay granted partly.

Summary

Issues:
Service tax liability on catering services provided by a Mandap Keeper, applicability of service tax on food charges collected, invocation of extended period for confirming demand, interpretation of taxable services under the Finance Act, 1994, and the requirement of pre-deposit for appeal.

Analysis:
The case involved a dispute regarding the service tax liability of a company registered as a Mandap Keeper providing catering services. The appellant contended that service tax was not applicable to the food charges collected from customers as it constituted a sale of food, exempt from sales tax. The Revenue argued that service tax was applicable based on legal precedents, including a Supreme Court decision. The Tribunal analyzed the definitions of taxable services under the Finance Act, 1994, and referred to the Supreme Court's interpretation in a similar case. It was established that services provided by Mandap Keepers as caterers were liable to service tax. The Tribunal directed the appellant to make a pre-deposit of Rs. 53 lakhs within eight weeks, with the balance of dues waived during the appeal's pendency.

The appellant's argument relied on previous decisions and the distinction between catering services and sale of food. The Revenue countered by citing legal precedents and the nature of service tax on Mandap Keeper and outdoor catering services. The Tribunal noted the extensive services provided by Mandap Keepers and the predominant nature of service over the sale of goods in such transactions. The Tribunal concluded that the appellant failed to justify a full waiver of pre-deposit and upheld the service tax liability on catering services provided by the Mandap Keeper.

The Tribunal addressed the issue of time-bar as a question of fact and law, to be examined during the final hearing. The demand for the normal period was approximately Rs. 53 lakhs, and the Tribunal directed the appellant to make the specified pre-deposit within a stipulated timeframe. Compliance with the pre-deposit requirement would result in the waiver of the balance of dues adjudged against the appellant during the appeal process, with recovery stayed pending the appeal's outcome.