TMI Blog2018 (7) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... IJAY KUMAR VYAS, JJ. For The Appellant : Shri Sandeep Pathak For The Respondent : Shri Sanjay Jhanwar with Ms. Arachana Order 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has partly allowed the appeal of the assessee. 2. This court while admitting this appeal on 30.01.2013, framed following substantial question of law : Whether the Tribunal is correct in holding that no service tax is leviable/payable on the charges collected in the name of booking of the Rooms which were integrally used in connection with the functions organized by the organizers in the adjacent gardens/ and the payment for the entire premises was made by the organizers under a composite contract whereas the Service Tax is leviable on the gross amount charged from the customers under the category of Mandap Keeper Services in terms of the provisions of Section 67 of the Act, 1994 ? 3. Counsel for the appellant has taken us to the order of the first authority where pursuant to the notice issued by the authority after considering the definition, it has observed as under :- 5.4 The issue before me for deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice Tax charged, is equivalent to consideration; ( iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. ( v) Further, Section 67(3) of the Finance Act, 1994 stipulated that the gross amount charged for taxable service shall include any amount received towards the taxable service before, during or after provision of such service. ( vi) Sub-rule (1) of Rule 5 of the Service Tax (Determination of Value) Rules, 2006 provides that where certain expenditure or cost are incurred by the service provider in the course of providing any taxable service, all such expenditure or costs shall be treated as consideration for the taxable services provided or to be provided and shall be included in the value for purpose of charging of Service Tax. This is a general rule which makes it clear that irrespective of the manner of billing such expenditure or costs are includable in the value of taxable service. Further explanation 2 to the rule clarifies that, the value of taxable service is the total amount of the consideration consisting of all components of taxa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he room rent charges was not applicable. Here I find that the assessee have provided the banquet/conference halls and gardens to hold the functions of marriage ,conference meetings along with the rooms for stay of the persons who participated in such functions, under a composite contract. The rooms were booked by the clients foe stay of their members/participants of such functions. Stay of the participants at a place where the function is organized is an important consideration for the organizer of the function while booking the mandap for holding the social or business function. The assessee has admitted that it is under a composite contract that the bookings are made. The stay of non participants of any social or official function in their rooms is certainly out of the purview of the tax net under the said service, however ina given set of circumstances when the booking is composite and stay of the participants is in the same place as the mandap, then such rooms are an extension/integral part of the mandap. To take one example which is available on record, I have seen one of the letter which is a Revised Function Proposal for Mr. Luhadia s event signed by one Shri Ram Rathore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Service. The amount charged in the name of renting of rooms to the participants of the marriage parties/ conference/ meetings is chargeable to Service Tax in terms of Section 67 of the Finance Act, 1994 being a consideration for the taxable services provided includible in the value for purpose of charging of ServiceTax and it is immaterial whether it is . and contended that in view of the definition of the taxable service for Mandap Keeper Service in terms of the provisions of section 67 of the Act, 1994, the matter is required to be considered. He has also further relied upon the order of the authority which reads as under :- 5.9 Further the assessee has requested not to impose penalties under Section 76 and 78 of the Act as they were under bona fide belief that they are not liable to pay tax and that in the absence of any contemptuous conduct or deliberate defiance on their part, no penalty is called for or warranted failure to pay Service Tax in the case and, therefore, the benefit of waiver of penalty under Section 80 of the Finance Act, 1994, cannot be extended. I find that once it is held that extended period is in vocable in the case then the penal provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conference ans as such are covered under the Mandap Keeper Service. The amount charged in the name of renting of rooms to the participants of the marriage parties/conference/meeting is chargeable to Service Tax in terms of Section 67 of the Finance Act, 1994 being a consideration for the taxable services provided includible in the value for purpose of charging of Service Tax and it is immaterial whether it is billed together or separately. Reference Code Issue Clarification 012.01/23.08.07 Mandap is defined as any immovable property as defined in section 3 of the Transfer of Property Act, 1882 and includes any furniture, fixtures, light fittings and floor coverings therin let out for a consideration for organizing any official, social or business function. [Section 56(66)] Mandap Keeper is defined as a person who allows temporary occupation of a mandap for a consideration for organizing any official, social or business function (Section 65(67)) Whether hotels/restaurants letting out their halls, rooms etc. for social, official or business functions fall within the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise. Thus, the term ;Mandap covers any immovable property, which is let out by any person for a consideration for organizing any official, social or business function. Further Mandap Keeper has been defined to mean a person who allows temporary occupation of a mandap for consideration for organizing any official, social or business function. I find that all the point raised by the appellant has been discussed in the impugned order by the adjudicating authority and I agree with findings of adjudicating authority in this regard. In view to this, I hold that the rooms provided by the appellant even for temporary stay to the customers for organizing marriage conference meetings is covered under definition of Mandap keeper. Hence, any consideration received by the appellant on this account is also includible in the consideration received against mandap keeper service, which is liable to service tax under chapter V of the Finance Act, 1994. I thus uphold the demand of service tax under chapter V of the Finance Act, 1994. I thus uphold the demand of service tax amounting to ₹ 17,05,143/- . Since demand is held to be sustainable on merits the appellant is also liable to pat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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