2011 (1) TMI 650 - AT - Service Tax

Demand - Mandap keeper service - Time limitation - cost of goods sold - exemption under notification no. 12/2003 - there was no sale involved in the Appellant’s transaction as Mandap keeper while serving their customers, for there is no sale of food and beverage as defined in section 2(h) of the Central Excise Act, 1944. When there is no sale of any materials or goods, the exemption under Notification No. 12/03-ST would not apply. This exemption notification is inapplicable to indivisible service contracts like the present one in hand.

The plea that service tax can not be levied on the portion of value of Mandap Keeper Service which represents the value of food and beverages served is baseless. In fact in paras 42 & 43 of the Apex Court judgment in case of Tamil Nadu Kalyana Mandapam Association (2004 -TMI - 135 - SUPREME COURT OF INDIA) it has been held in very clear terms that Article 366(29A)(f) only permits the states to impose a tax on the supply of food and drinks by whatever mode it may be made and it does not conceptually or otherwise includes the supply to services within the definition of sale and purchase of goods. - Decided against the assessee.

It was pleaded that in absence of fraud, suppression of facts, wilful misstatement etc. with intent to evade the payment of tax penalty under section 78 ibid is not called for - Held that: there is no suppression of facts etc. on the part of the Appellant and this is a case of interpretation of exemption notification, and since the criteria for imposition of penalty under section 78 ibid is the same as the criteria for invoking extended limitation period under proviso to section 73(1), there are no grounds for imposition of penalty under section 78.