2018 (7) TMI 2041 - AT - Service Tax

Service Tax Upheld for Pandal Contractor despite Partial Supply Argument

The Tribunal upheld the Department's decision that the appellant, providing Pandal or Shamiana Contractor Services, was liable to pay Service Tax totaling ... Levy of Service tax - Pandal or Shamiana Contractor Services - period November, 2004 to January, 2007- demand of service tax alongwith interest and penalty - HELD THAT:- In view of Section 65 (77a), ‘Pandal’ or ‘Shamiana’ is defined to mean a place specifically prepared or arranged for organizing an official, social or business functions; and under Section 65(77b) ‘Pandal or Shamiana Contractor’ means a person engaged in providing any service, either directly or indirectly, in connection with the preparation, arrangement, erection or decoration of a Pandal or Shamiana and includes the supply of furniture, fixtures, lights and light fittings, floor coverings and other articles for use therein - Section (105) (zzw) enumerates any service provided or to be provided to any person by a Pandal or Shamiana Contractor in relation to a Pandal or Shamiana, in any manner and including the services, if any, provided or to be provided as a caterer, to be the taxable service. Thus, the supply of furniture by the petitioner for Rajasthan Diwas and like functions clearly falls within the ambit of the taxable service - demand upheld - appeal dismissed - decided against appellant. Issues:1. Liability to pay Service Tax for Pandal or Shamiana Contractor Services.Analysis:The appellant, engaged in providing taxable services falling under the category of Pandal or Shamiana Contractor Services as defined under Section 65(77b) of the Finance Act, 1994, filed an appeal against the Order-in-Appeal. The Department concluded, after investigation, that the appellant was liable to pay Service Tax totaling Rs. 3,34,048 for the period November 2004 to January 2007. Both authorities below found the appellant liable for the Service Tax, interest, and penalty.Arguing the grounds of appeal, the appellant contended that they were not liable to pay Service Tax as they only supplied furniture, fixtures, lights, and floor coverings without tents or Shamianas. The appellant argued that Service Tax could not be levied unless these items were supplied along with tents or Shamianas.The Department, represented by Shri G.R. Singh, justified the impugned order, stating that the provision of articles like fixtures and lights in connection with the preparation of a Pandal or Shamiana would attract Service Tax under the relevant category.Upon hearing both sides and examining the record, the Tribunal referred to the definitions under Section 65(77a) and 65(77b) of the Finance Act, which clearly outlined the scope of services provided by a Pandal or Shamiana Contractor. The Tribunal noted that the supply of furniture by the appellant for events like Rajasthan Diwas fell within the taxable service category.Consequently, the Tribunal found no reason to interfere with the impugned order, which was upheld for the reasons stated therein. As a result, the appeal filed by the appellant was rejected, and the order was pronounced in open court on 25th July 2018.