Late factual defence cannot defeat mandap keeper service tax demand where liability was earlier accepted and tax remained unpaid.

A factual defence that a mandap was rented to a third party could not be raised for the first time in second appeal when it had not been put before the lower authorities and no prima facie material, including the alleged tenant's identity, was produced. On the admitted record, the assessee had accepted tax liability, sought time to pay, and was found to have provided mandap keeper services for consideration without payment of service tax. The demand was therefore sustained, and the penalties under Sections 76, 77 and 78 were upheld.

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Issues: Whether the appellant could, at the second appeal stage, dispute liability on the ground that the mandap had been rented to a third party and whether the demand of service tax and penalties under Sections 76, 77 and 78 were sustainable.

Analysis: The appellant had not raised the alleged leasing arrangement before the authorities below and had, on the contrary, accepted tax liability and sought time to deposit the dues. No prima facie material was produced to show that the mandap was let out to any third person, and even the name of such person was not disclosed. The plea was therefore a factual defence raised belatedly and could not be entertained at the second appeal stage. On the admitted facts, the appellant was providing mandap keeper services and receiving consideration without payment of service tax, which justified confirmation of demand and penalties.

Conclusion: The challenge to the service tax demand and penalties failed, and the orders of the lower authorities were upheld.

Final Conclusion: The appeals were dismissed, with the demand and penal consequences remaining intact.

Ratio Decidendi: A factual defence not raised before the lower authorities and unsupported by prima facie material cannot be entertained for the first time in second appeal, especially where the assessee had earlier accepted tax liability and the record shows undisclosed taxable service and receipt of consideration without payment of tax.

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