Service Tax on Immovable property for Mandap Keeper service - sustainability of SCN when functions not specified

PJ/Case Laws/2011-12/1542

Case: Commissioner of Central Excise, Ludhiana V/s Muncipal Council

Citation: 2011 (24) S.T.R. 705 (Tri.- Del.)

Issue:- Show cause notice demanding Service Tax on ground that Mandap Keeper service provided however, the functions performed on immovable property not specified in SCN – SCN not sustainable.

Brief Facts:- Respondent received amount of Rs. 4,26,000/- on account of renting out land and open ground for the period 12-2-03 to March, 2005 and receipt of Rs. 6,000/- each for financial years 2005-06 & 2006-07 and Rs. 93,000/- received during the financial year 2007-08 (upto 31-12-07).

Enquiry was made to know the reason why such amount shall not be taxed under Finance Act, 1994. Show cause notice was issued raising demand of service tax by treating the service provided as Mandap Keeper Service.

In appeal, the Commissioner (Appeal) set aside the adjudication order.

Hence, Revenue is in appeal before the Tribunal.

Appellant’s Contention:- Revenue pleads that money was received by the respondent for providing Mandap Keeping Service. Therefore, adjudication was made properly and that should not have been reversed by first appellate authority. Revenue being aggrieved by such reversal prays for restoration of the adjudication order.

Reasoning of Judgment:- The Tribunal noted that the show cause notice does not bring about the nature of use of immovable property while what a Mandap means is defined by law. According to law any immovable property including letting out of any furniture, light fitting and floor covering therein to hold any official, social or business function is categorized to be Mandap. Who is Mandap Keeper is also known to law by a statutory definition. He is the person or concern who allows temporary occupation of the Mandap for a consideration for organizing any official social or business function.

It was held that when the authority issued notice which is foundation for a proceeding, failed to bring out clearly the nature of the receipt and whether such receipt brought the respondent to the fold of law official, social or business functions if performed over the immovable property that may make the property to be Mandap in the eyes of law. There is nothing whisper in the show cause notice as to whether the receipt made by the respondent was in relation to or in respect of any of the functions envisaged by law to be performed using the immovable property. It was found that there is no substance in the show cause notice.

Decision:- Appeal dismissed.

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PJ/Case Laws/2011-12/1542

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