By TIOL News Service

NEW DELHI, JUNE 26, 2014 : THE appellant is registered for providing Mandap Keeper service. The period in question is 24.7.2001 to 10.6.2004 and during this period they were remitting service tax under the category of "Mandap Keeper" after availing abatement in terms of exemption Notification No.12/2001-ST dated 20.12.2001 and filing regular returns.

Invoking the extended period of limitation, the Revenue vide SCN dated 3.1.2006 alleged that the services are properly classifiable under ‘Convention Service' and demanded Service Tax of Rs.1,98,038/-, apparently by denying the exemption. It was alleged that the appellant rented out the Conference Hall (Banquet Hall) for meetings/conferences/assembly to pharmaceutical companies, insurance companies, marketing companies etc. during the period and this amounted to rendition of "Convention" and not "Mandap Keeper" service as claimed by the appellant.

The order passed by the adjudicating authority confirming the demand & imposing penalties, interest etc. was upheld by the Commissioner(A) and, therefore, the appellant is before the CESTAT.

The Bench adverted to the definitions of “mandap keeper” & “convention” and the Circular/letter F.No.B.11/1/2001-TRU, 9th July, 2001. As for the Board letter dated 09/07/2001, the CESTAT commented that it is not able to fully comprehend the “subtle” distinction clarified by the Board qua this Circular.

Be that as it may, the CESTAT observed -

“9. The Board Circular dated 9.7.2001 was relied upon by this Tribunal, in   C.C.E., Cochin vs. Casino Hotel - 2010 (19) STR 425 (Tri-Bang.)   =   2010-TIOL-109-CESTAT-BANG   and in C.C.E., Cochin vs. Avenue Regent - 2010(17) STR 284 (Tri-Bang.)   =   2010-TIOL-121-CESTAT-BANG   to conclude 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. We also notice that 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.”

Holding that the order is not sustainable the appeal was allowed.

In passing : Wah, Taj!

(See 2014-TIOL-1128-CESTAT-DEL)