TaxTMI 
TaxTMI 
2006 (4) TMI 34
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be heard and disposed of on the aforesaid two question at this stage. 3. The appellant is a charitable trust registered under the Bombay Public Trust Act. It holds a building at Tejpal Scheme Road No. 4. Vile Parle (E), housing two main halls on the ground and first floor and a small hall on the second floor. The halls on the ground and first floors are given by the trust on hire for official, social and business functions. The appellant entered into two separate contracts thereby giving M/s. Saideep Caterers and Decorators (for short 'Saideep Caterers') the exclusive rights for rendering the services of catering and decoration to the hirer using the said halls for official, social and business functions. Saideep Caterers in consideration paid a sum of Rs. 8,35,000/- to the appellant in instalments between 26-5-2001 to 26-8-2002. A sum of Rs. 9,80,000/- was also paid by Saideep Caterers to the appellant towards consideration during the period 1997-98 to 2000-2001. 4. The Superintendent, Service Tax, Central Excise Range 3, Mumbai-IV issued notice dated 19-2-2001 to the appellant regarding the service tax payable by the appellant on the aforesaid sum received from Saideep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....V of the Finance Act, 1994 as amended from time to time. 10. Though the service tax was introduced in Chapter V of the Finance Act, 1994, the said Chapter has been amended from time to time bringing in various additional services under the net of taxable service. The definition of 'taxable service' qua the service provided to the client by a 'mandap keeper' in relation to the use of 'mandap' and so also the definition of 'mandap keeper', 'mandap' and 'caterer' for the relevant period with which this appeal is concerned remains the same but the number of the said clauses has changed because of additional services brought in. For the sake of convenience, we shall refer to the clauses in Section 65 immediately prior to the amendment made in the financial year 2003. 11. Section 65 of the Act to the extent it is relevant for the purposes of this appeal reads thus - 65. "In this Chapter, unless the context other wise requires, - (22) "Caterer" means any person who supplies, either directly or indirectly, any food, edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or accoutrements for any purpose ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces to the hirer if they so require. Can it be said that by according right of monopoly to Saideep Caterers to be the only caterer entitled to provide catering services and decoration to the hirer is the 'taxable service' and the consideration received from Saideep Caterers is chargeable to service tax. The answer is plainly in the negative. The reason being that the taxable service in relation to the use of mandap (as defined) is the service to the hirer. The charges received from the hirer in relation to the use of mandap including the facilities provided to the hirer in relation to such use is taxable service. If the appellant renders service as a caterer to the hirer, then such service is a taxable service. By entering into the two agreements with Saideep Caterers and giving them the monopoly to provide for catering and decoration to the hirer of the halls, cannot be said to be providing the service by the appellant to the hirer as a caterer. It is true that any person who supplies, either directly or indirectly any food, edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or accoutrements for any purpose or occasion is a 'cate....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is true that under the two agreements entered in to between the appellant and Saideep Caterers, the right to render the services of catering and decoration to the hirer has been given solely and exclusively to the Saideep Caterers. It is also true that rates for such services of catering and decoration to be provided by Saideep Caterers have been mentioned in Schedule "A" attached to the agreements. It is further true that the appellant has undertaken not to let out its halls to any such person who refuses to avail of the services of caterer from Saideep Caterers if such services are required by the hirer. But that would not mean that the appellant is providing the services to the hirer as a 'Caterer'. What is of paramount importance for 'taxable service' is the service provided to a client by the 'mandap keeper' in relation to the use of 'mandap' in any manner including the facilities of any nature but the service to be a 'taxable service' must be a service provided to a client (hirer) by a 'mandap keeper'. 15. Section 67 says that the valuation of taxable service for charging service tax shall be the gross amount charged by such m....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by such mandap keeper from the client for the use of mandap including the facilities provided to the client. The consideration in question received by the appellant from Saideep Caterers is not the amount charged by the appellant from the hirer of the halls and, therefore, it is clear that the amount received from Saideep Caterers giving them monopoly rights for rendering services of catering and decoration to the hirer is not covered by section 67. Resultantly, such amount would not be chargeable to service tax. 19. We may now refer to the judgment of the Supreme Court in the case of Tamil Nadu Kalyana Mandapam Assn. v. Union of India and Others, 2006 (3) S.T.R. 260 (S.C.) = 2004 (167) E.L.T. 3 (S.C.)= 2004 (267) ITR 9. The Madras High Court dismissed the writ petition filed by the appellant-association challenging the constitutional validity of Sections 66 and 67(o) of the Finance Act, 1994 and Rule 2(1)(d)(ix) of the Service Tax Rules, 1994.The Supreme Court upheld the judgment of the Madras High Court. 20. Mr. A.J. Rana, senior Counsel for the revenue relied upon the following observations of the Supreme Court: Similarly the services rendered by outdoor caterers are clearly....