2014 (7) TMI 160 - AT - Service Tax

Classification - Convention center service or Mandap Keeper Service - appellant rented out a Conference Hall (Banquet Hall) for meetings/conferences/assembly - Held that - Prima facie, for falling under ambit of convention and for classification as a provider of convention service it is not a legislated ingredient that the service (provided by one person to another in relation to holding of a convention not open to the general meeting/assembly public) should be provided only in /upon immovable property including any furniture , fixtures, light fittings and floor coverings therein let out for a consideration for organizing any official, social or business function. Board Circular dated 9.7.2001 clarified that the intention is not to charge service tax twice on the same service; if a service provider is already registered as a mandap keeper and is paying service tax, he is not liable to pay service tax again under the category of convention service. This Circular identifies a subtle distinction between official, social or business function which fall within the scope of mandap keeper and a formal meeting which fall within the scope of convention service. We have not fully comprehended the subtle distinction clarified by the Board qua this Circular. Be that as it may. Extended period of limitation - Held that - Where a person (service provider) is registered as a mandap keeper, the demand of service tax under convention service, particularly by invoking the extended period of limitation is not justified and that having regard to the ambiguity between the scope of the two taxable services, it would be illegitimate to allege suppression of facts or an intention to evade taxes - neither the show cause notice, the primary authority nor the Appellate order had alleged or concluded that renting the appellant s Banquet Hall to pharmaceutical, insurance and other companies was for holding formal meetings or assembly which is not open to the general public, the specific ingredients for a transaction to fall within the ambit of convention , defined in Section 65 (32) of the Act - Decided in favour of assessee.

Summary

Issues:
Classification of services under 'Mandap Keeper' or 'Convention' category for service tax liability.

Analysis:
The appellant contested the order confirming the service tax demand for rendition of 'Convention' service instead of 'Mandap Keeper' service. The period in question was from 24.7.2001 to 10.6.2004, during which the appellant remitted service tax under 'Mandap Keeper' category after availing abatement. The dispute arose when the show cause notice invoked the extended period of limitation, alleging that the services provided were appropriately classifiable under 'convention service.' The contention revolved around the rental of a Conference Hall for meetings, conferences, etc., to various companies, which was argued to constitute 'convention' service, contrary to the appellant's claim of 'Mandap Keeper' service.

The legal definitions under the Act were crucial in determining the classification of services. The Act defined 'mandap' and 'mandap keeper' in Section 65, while 'convention' and 'convention service' were defined in Section 67. The distinction between the two categories was significant, with 'mandap keeper' involving temporary occupation of immovable property for functions, and 'convention' encompassing formal meetings or assemblies for amusement or entertainment. The Board Circular of 9.7.2001 highlighted the subtle difference between events falling under 'mandap keeper' and 'convention' services, emphasizing that service tax should not be charged twice for the same service. This interpretation was supported by previous Tribunal judgments, which deemed demanding service tax under 'convention service' unjustified when a provider was already registered as a 'mandap keeper.'

The Tribunal, in line with the precedent and the analysis of the facts, found that the impugned adjudication order was unsustainable. The lack of specific allegations or conclusions regarding the nature of the appellant's transactions with companies in the show cause notice or the primary authority's order led to the conclusion that the appellant's services did not fall within the ambit of 'convention' as defined in the Act. Consequently, the appeal was allowed, and the Commissioner's order was quashed, with no costs imposed.