TaxTMI 
TaxTMI 
2025 (12) TMI 560
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....d provide part of the land parcel situated within the premises for lease of rental basis. These activities were interpreted by the Department as the appellants had provided the taxable service of 'mandap keeper' and 'renting of immovable property' Chapter V of the Finance Act, 1994. On the basis of intelligence gathered which indicated that the appellants had not obtained service tax registration and carried on provision of taxable services without payment of service tax, the Department had conducted enquiry about the activities of the appellants and initiated show cause proceedings. During the course of enquiry, the Department had found that the facilities available in the sports stadium premises were being utilised by various organisations, associations against receipt of valuable consideration by the appellants. Further, the appellants had also entered into a 'concession agreement' with M/s BW Highway Star Private Limited to build up a hotel on BOT (Built Operate Transfer) basis in the premises of the appellant for running hotel business. Furthermore, statements were recorded from persons concerned, including Assistant Director of sports complex and information was also collecte....
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....Commissioner after perusal of the reply submitted by the Appellant vide their letter dated 17.01.2017 and after giving a personal hearing on 17.01.2017, had proceeded in issue of Order-in-Original dated 22.03.2017 in confirmation of service tax demands made in the SCN to the extent of Rs.75,92,214/- on mandap keeper service and Rs.77,00,881/- on renting of immovable property service, and dropped the demand in respect of reservation fees, room rent collected for facilities available at the sports complex. Feeling aggrieved with the impugned order dated 22.03.2017, the appellants have filed this appeal before the Tribunal. 3.1 Learned Advocate appearing for the appellants submitted that the appellants being part of the Government of Maharashtra, Ministry of Education and Sports, had constructed a Sports Stadium namely Shiv Chhatrapati Kreeda Peeth at Mahalunge, Balewadi, Pune. The land on which stadium had been constructed, the stadium by itself and all the facilities available in the stadium are owned by Government of Maharashtra and are entirely controlled by Dept. of Youth Affairs and Sports, Govt. of Maharashtra and operate as a non-commercial project. The facilities at the st....
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....has been confirmed. Since, these are only in the nature of 'advance amount' collected for using the sports facility which are refundable, when the booking is cancelled; and transferred to the head of relevant 'income' when the sports facilities are actually provided, these are not separate receipts and is not in the nature of an income for provision of service. In other words, such confirmation of tax would amount to double taxation of the same amount as 'advance' and when the same is accounted as 'income' upon transfer of it when the facility is used. 3.3 Furthermore, She stated that 'Suvidha Vapar Bhade' amounting to Rs.7,31,61,419/- collected are actually charges for providing sports facilities at sports complex to individual players, sports associations, schools, colleges etc. In terms of Section 65(67) the Finance Act, 1994, 'mandap keeper' means a person who allows temporary occupation of a mandap for a consideration for organising any official, social or business function; that as per section 65(66) 'mandap' means any immovable property as defined under section 3 of Transfer of Property Act and includes furniture fixtures, light fittings, floor coverings let out for....
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.... activity of giving vacant land on lease or licence basis for construction of building or temporary structure at a later stage to be used for furtherance of business or commerce has been brought under the tax net as 'Renting of immovable property service' w.e.f. 1.7.2010; that for the disputed period prior thereto i.e., 1.4.2008 to 30.6.2010, such an activity was not leviable to service tax. Moreover, she stated that undisputedly, the appellants are a government body and facilities provided/services provided by government are not leviable to service tax in terms of Section 66D(a) of Finance Act, 1994, except those provided by inter-alia Department of Posts, transport of goods or passengers etc.; that in cases of support services provided by government to business entities, the recipient business entities are liable to pay service tax as per Notn.No.30/2012-ST. Therefore, learned Advocate submitted that the demand of serviced tax in the impugned order is not sustainable and the appeal filed by the appellants may be allowed. 3.6 In support of their stand, learned Advocate had relied upon the following orders passed by this Tribunal and such order affirmed by the Hon'bl....
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....f the case as submitted by the learned Advocate in the earlier paragraphs, right from the stage of enquiry proceedings and issue of SCN to the impugned order which is appealed against in the present appeal. 8. In the impugned order dated 27.05.2016, learned Commissioner had examined the issues under dispute and had recorded his findings as follows: "28.3. The assessee has collected the following amount on account of providing services:- Table I Sr. No. Particulars Value of Services i. Reservations for facilities available in the stadium 63,85,935/- ii Rent for facility available at Sports Complex 7,31,61,419/- iii Fee collected for using Swimming Pool 25,26,950/- iv Fee collected for using facilities for playing Tennis 4,64,050/- v Rent collected from the players and employees for using hostel 1,45,35,624/- vi Fees collected for using facility for playing Table Tennis 11,61,100/- vii Fees collected for using facility for playing Badminton ....
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....plex). In this regard, they have contended that these are booking charges collected as a deposit, from persons who intend to use facilities available in sports complex; that these charges are refundable when booking is cancelled and transferred to main income head when facilities are actually provided; that since, these are in the nature of deposits for using the sports facility and the same is covered as income in subsequent period, no Service Tax is payable on Rs.63,85,935/-collected as deposit in the year 2008-09. Further, as per Section 65(105)(m) of the Finance Act, 1994 "taxable service" means any service provided or to be provided - to any person, by a "Mandap keeper" in relation to the use of Mandap in any manner including the facilities provided or to be provided to such person in relation to such use and also the services, if any, provided or to be provided as a caterer. This means that even if deposits are received from the recipients for services 'to be provided' by the assessee, the same would be chargeable to service tax in terms of Section 67(3) of the Act, which stipulates that 'The gross amount charged for the taxable service shall inc....
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....31-03-2012, they are liable to pay service tax totally amounting to Rs.75,92,214/- (Rs. Rs.68,89,739/- + Rs. 7,04,275/-,) as discussed in para 28.4 above and as per the worksheet below. Sr. No. Particulars Value of Services Taxable Value Service Tax i Reservations for facilities available in the stadium 63,85,935 57,89,606 7,02,475 ii Rent for facility available at Sports Complex 73,16,419 66,32,482 6,88,739 Total 75,92,214 RENTING OF IMMOVABLE PROPERTY SERVICES: Before getting into the merits, I would like to reproduce the relevant statutory provisions relating to the taxability of this service, which are as under:- xxx xxx xxx xxx 29.4 On going through the Schedule- "A" of the aforesaid agreement, it is observed that around 6.10 Acres (i.e. 24685 Sq. Mtrs.) has been leased out to build a Hotel of 400 rooms. Apart from this, around 3.50 Acres land has also been leased out for development of parking and Landscape Garden at a rent of Rs.1/- per ....
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....rty or any other service in relation to such renting, for use in the course of or for furtherance of, business or commerce. Explanation 1.-For the purposes of this sub-clause, "immovable property" includes- (i) building and part of a building, and the land appurtenant thereto; (ii) land incidental to the use of such building or part of a building; (iii) the common or shared areas and facilities relating thereto; (iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate, [Inserted by the Finance Act, 2010, w.e.f. 01-7-2010] (v) vacant land given on lease or license for construction of building or temporary structure at a later stage to be used for furtherance of business or commerce, but does not include- (a) vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes; (b) vacant land, whether or not having facilities clearly incidental to the use of such vacant land; (c) land used for educational, sports, circus, entertainment and parking purposes; an....
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....s in a stadium complex cannot be categorized as a 'official, business or social function' for charging service tax thereon. 9.3 In the impugned order, learned Commissioner had agreed to the contention of the appellant that the amount of rent collected from the players and employees for using the hostel and employee quarters cannot be subject to service tax under Mandap Keeper Services since none of these activities can be treated as social, official or business function. However, for the purposes of use of the vacant land appurtenant thereto, which have been used for parking and landscape gardening of the sports complex and partly for building hotel, he had confirmed the service tax demand under the category of 'renting of immovable property' service. 9.4 In this regard, we find that on the aforesaid issues of taxability to service tax in respect of vacant land of the sports stadium has been dealt with by the Co-ordinate Bench of the Tribunal in the case of Jharkhand State Cricket Association (supra), where the department had appealed against the dropping of demand by original authority, and it was held by the Tribunal that the service tax demand has been rightly ....
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....ld that the service rendered in this regard by JSCA is not liable to service tax prior to 30.06.2012. W.e.f. 01.07.2012, under the category of 'declared services', the ground rent received for playing cricket, which is not in furtherance of business, is not taxable. In respect of the other services wherein demands were dropped by the ld. adjudicating authority, we do not find any infirmity in the dropping of the demand by the ld. adjudicating authority." 9.5 Further, we also find that on the issue of levy of service tax on the sports stadium of the self-same appellants treating it as commercial or industrial construction in the case of B.G. Shirke Construction Technology Private Limited (supra), the Tribunal has examined the issues and held that the appellants are liable to service tax. The relevant paragraphs of the said order are quoted below: "3.3 From this circular, it is clear that if in the records maintained by the local authorities, it is not to be used for commercial purposes, then Service Tax liability is not attracted. Further, even if construction built for non-commercial purposes and primarily not used for commercial or industrial purposes, renting ou....
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...., water supply and distribution, watershed development, or airport facility. (b) Any other Federal and street road or highway. (c) Any other public building, structure, or system, including those used for educational, recreational, or cultural purposes. (d) Any park." 6.3 The Sports Stadia is used for public purpose. Merely because some amount is charged for using the facility, it cannot become a commercial or industrial construction. Even in a Children's Park, entry fee may be levied for maintenance of the Park. Merely because some amount is charged for using the Park, it cannot be said that it is a commercial or industrial construction. Adopting the same logic, the Sports Stadia in the present case is also a non-commercial construction for use by the public. Therefore, we are of the considered view that the Sports Stadium constructed for conducting Commonwealth Games, is a non-commercial construction. 7. In view of the foregoing, who hold that Shiv Chhatrapati Sports Complex constructed by the appellant, M/s. B.G. Shirke Construction Technology Pvt. Ltd., is a non-commercial construction and, therefore, it is not liable to Service Tax ....
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....ot attract the levy of the service tax as further part of the definition would indicate. The said construction, in order to attract service tax, will also have to satisfy the conditions laid down by subsequent part of the definition i.e. (i) used, or to be used, primarily for; or (ii) occupied, or to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry.......... (emphasis supplied by us) 16. The language employed in the definition clause is clear and unambiguous. The plain meaning as can be understood from the definition clause, more particularly, the clarification contained in clauses (i), (ii), (iii) is that the construction ipso facto is not leviable to service tax, but it is only when it is used, or to be used, primarily for "commerce" or "industry" or work intended for "commerce" or "industry" that service tax can be levied. Thus, it is only that construction which is to be used or primarily to be used for commerce that is subject to levy of service tax. 17. In the present facts, we find that dominant user of....