Letting out of Marriage Hall & Function Hall - godown charges collected - whether service tax leviable on the same?

PJ/Case Laws/2012-13/1072

Case: M. Madhuri Versus Commissioner of Central Excise, Guntur

Citation: 2006 (003) STR 0702 (Tri. - Bang)

Issue:- Service Tax – Providing service of letting for Marriage Hall & Function Hall – No service tax leviable on Godown charges.

Brief Facts:- Appellant-assessee was carrying on the business of Kalyana Mantapam, which has brought under Service Tax. The quantum of Service Tax has been arrived on the collection of Godown charges by the assessee. They had filed year details of statement of income wherein they have shown that the rent from letting out of Marriage Hall & Function Hall for the financial year 1997-98 is 40,000/-; for the financial year 1998-99 is Rs. 40,000/-; for the financial year 1999- 2000 is Rs. 43,000/-.

Appellant contended that the total amount of income by letting for Marriage Hall & Function Hall has been only Rs. 1,23,000/- and the Service Tax leviable is Rs. 8,775/- and not an amount of Rs. 25,029/- and penalty of sum as has held by the authorities below. It is contended that penalty is not available as the appellants are under bona fide belief about they being exempt from the Service Tax. In this regard, the Tribunal ruling in the case of CCE, Bangalore-III v. Impress Ad-Adis & Displays [2004 (173) ELT 0137 (Tri. - Bang.) is lied which has scaled down the penalty on assessee establishing their bona fide. The Tribunal has also ruled that Service Tax, being a new levy and the assessee being unaware about promulgation of the levy, therefore, in those facts and circumstances, exorbitant levy of penalty is not justified.

The Tribunal has ruled in the light of the Apex Court judgment rendered in the case of Hindustan Steel v/s State of Orissa -1978 (002) ELT (J159) (S.C.) and that of the Tribunal ruling rendered in the case of Smitha Shetty v. Commissioner - 2003 (156) ELT 0084 (Tribunal).

Reasoning of Judgment:- The Tribunal noted that the appellant has produced the detailed income statement for each year duly notarized and supported by an affidavit of the appellant who is a proprietor.

It was held that there is no reason to disbelieve this financial statement even on oath and by supporting affidavit and documents. Therefore, the Service Tax has to be levied only on income earned from Marriage Hall and Function Hall and not on the income earned on the Godown. The income, which works out on letting out of Marriage Hall and Function Hall, works out to Rs. 1,23,000/.- and the Service Tax thereon works out to Rs. 8,775/-. Hence, the Service Tax confirmed to an extent of Rs. 25,029/- is reduced to Rs. 8,775/- and penalty is reduced to Rs. 5,000/-. Impugned order modified.

Decision:- Appeal disposed off.

Comments

PJ/Case Laws/2012-13/1072

Post a Comment

Query