9911796707
TMI Blog2006 (11) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... tive Unit, Bangalore-III, on the basis of intelligence, conducted certain investigations regarding the appellants for the period from 1-2-1998 to 30-6-2002. It was found that the appellant, who were letting out their hail for organizing social/cultural functions were liable to pay Service Tax under the category of Mandap Keeper. Show Cause Notice was issued for demand of Service Tax for the above-mentioned period. Interest under Section 75 of the Finance Act, 1974 (sic) (1994) was demanded. Penalties under various sections were proposed. The Adjudicating Authority, confirmed the Service Tax demand of Rs. 2,09,943/- under Section 73 of the Act. He confirmed the interest also. He imposed the following penalties. (i) Rs. 500/- under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the context of levy of Service Tax on the Mandap Keepers is 'function' which implies a ceremony as held by the Northern Bench of the Tribunal in the case of India Trade Promotion Organisation v. CCE, New Delhi - 2006 (3) S.T.R. 218 (T) = 2004 (164) E.L.T. 163 (Tri. - Del). The lower authority has erred in holding a cultural activity as a social function by deriving an equation between the words 'social' and 'cultural'. (iii) What is applicable to the facts and circumstances of this case is Board's Circular No. 42/5/2002-S.T. dated 29-4-2002 and not the Circular No. F. 332/82/97-TRU dated 24-9-1997. (iv) The appellants produced copies of the affidavits of some of the appellant's patrons that clearly p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent did not initiate any action till as late as November, 2002 even in respect of similarly placed service provider whose services the department itself had availed during 1998-99, 1999-2000 while celebrating the Central Excise Day. This clearly shows that the appellants' understanding of the issue no different from that of the departmental officers. In these circumstances, penalty is not imposable. Since the appellant had a reasonable cause which resulted in the failure on the part of the appellant in filing the returns, this is a right case where the provisions of Section 80 of the Act is invocable. (ix) The learned Advocate relied on the following case-laws :- (a) India Trade Promotion Organisation v. CCE, Delhi-I - 2006 (3) S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is that they are letting out the premises only for cultural purposes like dance, drama, music etc. and these activities would not come within the ambit of social functions. In this connection, they have relied on the Tribunal's decision in the case of Social Service League (cited supra). In the said decision, it is held that drama performances being conducted in the hall/mandap cannot be covered under the levy of Service Tax as Mandap Keeper. The said order of the Tribunal has not given the detailed reasons for holding such a view. However, the Hon'ble Apex Court, in the Tamil Nadu Kalyana Mandapam case cited supra, has held that taxable services could include mere providing of premises on a temporary basis for organizi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered as social functions. We are in agreement with the reasoning of the CBEC in its Circular of 1997. Hence, the decision of the lower authorities in holding that the services rendered by the appellants is liable service tax under the category of Mandap Keepers is correct. However, it is that the appellants were under a bona fide belief that they would not be liable to service tax. Hence, this is a case where Section 80 of the Finance Act, 1994 can be invoked with regard to penalties. In fine, the appellants are liable to pay the Service Tax demanded along with interest. All the penalties are set aside. The appeal is disposed off in the above terms. (Pronounced in open Court on 28.-11-2006) - - TaxTMI - TMITax - Service ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
