Mandap keeper service covers letting out halls and stadiums for functions; penalty was deleted for bona fide belief and reasonable cause.

Letting out municipal halls and stadiums for consideration for social, official and business functions fell within the taxable service of mandap keeper because the definition covered temporary occupation of immovable property, including fixtures, for organising such functions; the service tax demand was therefore sustained. Penalty under Section 76 was set aside because Section 80 relief applied: the assessee, a statutory municipal body, acted under a bona fide belief that no tax was payable, and this constituted reasonable cause for the non-payment rather than deliberate evasion.

---

---

Issues: (i) Whether letting out municipal halls and stadiums for consideration for social, official and business functions fell within the taxable service of mandap keeper under the service tax law. (ii) Whether penalty was imposable where the assessee claimed bona fide belief and reasonable cause for non-payment of service tax.

Issue (i): Whether letting out municipal halls and stadiums for consideration for social, official and business functions fell within the taxable service of mandap keeper under the service tax law.

Analysis: The relevant definition treated a mandap as immovable property including fixtures let out for consideration for organising official, social or business functions, and a mandap keeper as a person allowing temporary occupation of such mandap for consideration. The admitted facts showed that the halls and stadiums were let out for consideration for various functions, including sports, garbas, educational, cultural, religious and official programmes. The earlier decision relied upon by the assessee was distinguished on facts because it concerned trade fairs and temporary markets.

Conclusion: The activity fell within the taxable service of mandap keeper, and the service tax demand was upheld.

Issue (ii): Whether penalty was imposable where the assessee claimed bona fide belief and reasonable cause for non-payment of service tax.

Analysis: Penalty under Section 76 was considered in the light of Section 80, which permits relief where the assessee proves reasonable cause for the failure. The assessee being a statutory municipal body and acting under a bona fide belief that it was not liable to service tax constituted reasonable cause, and the lapse was treated as an omission rather than deliberate evasion.

Conclusion: Penalty under Section 76 was set aside.

Final Conclusion: The service tax liability was sustained, but the penalty was deleted on the ground of reasonable cause and bona fide belief.

Ratio Decidendi: Letting out immovable property such as halls or stadiums for consideration for official, social or business functions constitutes mandap keeper service, but penalty for non-payment is not imposable where reasonable cause under the statutory penalty-relief provision is established.

---