2015 (11) TMI 1044 - AT - Service Tax

Appellant's Benefit Denial Upheld, Service Tax Demand Confirmed. Penalties Ruling Clarified.

CCE, Indore Versus M/s Apsara Restaurant & Vice-Versa

The appellant's contention regarding the denial of benefit under Notification No. 12/2003-ST was upheld due to the failure to produce required documentary ... Mandap keeper service - appellant contended that explanation in the definition of Mandap in Section 65(66) ibid to the effect that social function includes marriage was inserted on 1.6.2007 and therefore prior thereto property let out for a consideration for a marriage function would not be covered under Mandap Keeper Service. - Held that:- Even before the explanation was added from 1.6.2007 Mandap meant inter alia immovable property etc. let out for a consideration for organizing any official, social or business function. A marriage function is also a social function. Thus we are in no doubt that the said explanation added on 1.6.2007 was merely in the nature of ex abundante cautela and therefore has retrospective applicability. - Decided against the assessee. Benefit of Notification No. 12/2003-ST - benefit thereof can be granted only if the assessee is able to produce documentary evidence showing the value of the goods sold. As has been brought out by the original adjudicating authority as well as by the appellate authority, the appellant-assessee was not able to provide documentary evidence regarding the value of such goods and therefore benefit of the said notification was rightly denied to them. Indeed the lower authority in the absence of the documentary evidence of the value of the goods sold allowed 40% abatement in terms of notification 1/2006-ST which the assessee had itself claimed and paid service tax accordingly. Thus there is no infirmity as far as the confirmation of the impugned service tax demand is concerned. - Decided against the assessee. Levy of penalty - even if reasoning given by the appellate authority that if penalty under section 78 of the Act was imposed, penalty under section 76 of the Act could never be imposed may not be correct, the appellate authority was within its jurisdiction not to levy penalty under section 76 of the Act having regard to the fact that penalty equal to service tax had already been imposed under section 78 of the Act. This thinking was also in consonance with the amendment now incorporated though the said amendment may not have been applicable at the relevant time - Decided partly in favor of assessee. Issues involved:1. Denial of benefit of Notification No. 12/2003-ST to the appellant-assessee.2. Interpretation of the definition of Mandap Keeper service.3. Validity of penalties under Sections 76 and 78 of the Finance Act, 1994.Issue 1: Denial of benefit of Notification No. 12/2003-STThe appellant-assessee contended that the benefit of Notification No. 12/2003-ST was incorrectly denied to them. The notification exempts the value of goods and materials sold by the service provider from service tax, subject to documentary proof of the value of goods. The appellant failed to provide such evidence, leading to the denial of the notification's benefit. The lower authorities confirmed the service tax demand based on this lack of evidence, despite allowing a 40% abatement claimed by the appellant under a different notification. The denial of the benefit of Notification No. 12/2003-ST was upheld due to the appellant's failure to produce required documentary evidence.Issue 2: Interpretation of the definition of Mandap Keeper serviceThe appellant-assessee provided Mandap Keeper service, including food and beverages, but could not provide evidence of the goods' value sold during the service. The appellant argued that the value of goods should not be included in the assessable value for service tax purposes, citing relevant judgments. The definition of Mandap in Section 65(66) was crucial, stating that Mandap includes immovable property let out for official, social, or business functions. The explanation added in 2007 regarding social functions, including marriages, was deemed clarificatory and retrospective. The appellant's contentions regarding the definition of Mandap and the benefit of Notification No. 12/2003-ST were carefully considered, leading to the confirmation of the service tax demand.Issue 3: Validity of penalties under Sections 76 and 78 of the Finance Act, 1994The Revenue appealed against dropping penalties under Section 76, arguing that penalties under Sections 76 and 78 were not mutually exclusive during the relevant period. However, subsequent judgments and amendments indicated a refinement of penal provisions, making penalties under both sections mutually exclusive from a certain date. The Tribunal considered various legal precedents and held that while penalties under Sections 76 and 78 were not mutually exclusive before a specific date, the imposition of penalty under Section 78 justified not levying penalty under Section 76. The appeals were disposed of by restoring penalties under Section 76 for specific show cause notices and setting aside penalties under Section 78 for those notices, based on the evolving legal landscape and relevant judicial interpretations.This detailed analysis covers the denial of benefit under Notification No. 12/2003-ST, the interpretation of Mandap Keeper service definition, and the validity of penalties under Sections 76 and 78 of the Finance Act, 1994, as addressed in the Appellate Tribunal's judgment.