Whether marriage is a social or religious function?

PJ/CASE LAW/2015-16/2663

Case:-COMMISSIONER OF C. EX., PUNE-II VERSUSCENTRAL PANCHYAT

Citation:-2015 (37) S.T.R. 1038 (Tri. - Mumbai)

Brief facts:-Revenue is in appeal against Order-in-Appeal No. P-II/BKS/392/2005, dated 11-11-2005 passed by the Commissioner of Central Excise & Service Tax (Appeals), Pune-II.
The respondent M/s. Central Panchyat owned a hall. The said hall was rented out for conducting marriages and consideration was collected for such renting. The department was of the view that the said activity came under the purview of ‘Mandap Keeper Services’ and accordingly issued two notices dated 29-9-2004 and 20-4-2005 demanding Service Tax of Rs. 1,00,842/- and Rs. 23,929/- for the period July, 1999 to March, 2004 and April, 2004 to Sept, 2004 along with interest thereon and also proposing to impose penalties. The notices were adjudicated and the demands were confirmed and penalties were imposed. The appellant preferred an appeal before the lower appellate authority, who vide the impugned order held that marriage is a religious function and, therefore, the activity is not taxable as held in Commissioner of Central Excise v. Krishnapur Mutt- 2003 (157)E.L.T.182 = 2006 (3)S.T.R.144 (T).Accordingly, he set aside the demand and allowed the appeal. Aggrieved of the same, the Revenue is before tribunal.
The argument of the Revenue is that marriage is a ‘social function’ and not a ‘religious function’. As regards the reliance placed on the Krishnapur Mutt case, the Revenue submits that in that case the Mandap was let out free of cost and, therefore, the ratio of the said decision does not apply.

Appellant’s contention:- Learned Superintendent (AR) appearing for the Revenue while reiterating the grounds adduced in the appeal memorandum placed reliance on the decision of this Tribunal in the case of Shree Gujarati Samaj Bhavan v. Commissioner of Central Excise, Bhopal - 2006 (4)S.T.R.60 (Tri.-Del.),wherein it was held that marriage is a social function relying on the decision of the Hon’ble Apex Court in the case of Tamil Nadu Kalyana Mandapam Association v. Union of India - 2006 (3)S.T.R.260 (S.C.) = 2004 (167)E.L.T.3 (S.C.). In the said decision, the ratio of the Krishnapur Mutt (supra) was also distinguished as there was no consideration paid to the Mutt for conducting of marriage. Accordingly, it is prayed that the impugned order be set aside and the appeal be allowed.

Respondent’s contention:- The learned Counsel for the respondent submits that the marriage is a religious functions and Finance Act, 2007, added an Explanation to specifically provide for marriage to be considered as a ‘social function’ for the purposes of levy of Service Tax. Therefore, marriage has to be considered as a religious function only prior to 2007 and not otherwise. The explanation added in Finance Act, 2007 has only the prospective effect and cannot be applied retrospectively. It is also his contention that even if it is held that the marriage is a social function, the demand for the extended period of time is not sustainable as the appellant was under the bona fide belief that the marriage is a religious function as held in the Krishnapur Mutt case. Accordingly, it is pleaded that the demand for the extended period of time be set aside and penalty imposed on the appellant also be set aside for the same reason.

Reasoning of judgement:- Marriage as a social function existed much before the religions came into being and, therefore, it is futile to argue that the marriage is a religious function. The law itself recognizes registered marriage as a legally valid form of marriage and there is no religious sanctity attached to such registered marriages. Therefore, the mode of conducting the marriages either by following religious rituals or otherwise does not make marriage a ‘religious function’. Therefore, following the decision of the Tribunal in the case of Shri Gujarati Samaj Bhavan (supra), they hold that the marriage is a social function and not a religious function.
The explanation introduced by Finance Act, 2007 is only by way of abundant caution. Therefore, insertion of the explanation, in their view, does not affect the levy of Service Tax on Mandap Keeper Service rendered in connection with marriages.
As regards the plea of time-bar, there is merit in this submission. In view of the Tribunal’s decision in the case of Krishnapur Mutt case, the appellant could have been under the bona fide belief that their activity of letting out of hall for conducting marriage is not taxable. Accordingly, they give benefit of doubt to the appellant and hold that Service Tax demand is sustainable only for the normal period of limitation.
As regards the penalties imposed on the appellant, since the issue relates to interpretation of the statute, penalties are not warranted.
To sum up, they set aside the impugned order and allow Revenue’s appeal subject to the modification that the demand is sustainable only for the normal period of limitation. Needless to say the respondent is liable to pay interest on the Service Tax demand. Imposition of penalty is not warranted in this case. Accordingly, the Revenue is directed to re-compute the Service Tax demand. Since the appellant has not collected the Service Tax separately, the amount received shall be considered as cum-tax and Service Tax amount be computed accordingly.
The appeal is disposed of in the above terms.

Decision:-Appeal disposed of.

Comment:-The analogy of the case is that Marriage is a social function and not a religious function. Marriage as a social institution existed much before the religions came into being and therefore, it is futile to argue that marriage is a religious function. Mode of conducting the marriage either by following religious rituals or otherwise does not make marriage a ‘religious function’. Insertion of Explanation in Finance Act, 2007 is only by way of abundant caution and does not affect the levy of Service Tax on Mandap Keeper service rendered in connection with marriages.

Prepared by:- Monika Tak

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PJ/CASE LAW/2015-16/2663

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