COMMISSIONER OF CENTRAL EXCISE Vs. JAIN KALAR SAMAJ

JUDGEMENT

(1.) APPEAL No. S.T./137/09 is filed by the Revenue against impugned Order -in -Appeal dated 23 -4 -2009 in which Commissioner (Appeals) confirmed the Service Tax demand of Rs. 8,26,080/ - along with interest and imposed penalty under Section 78, but refrained from imposing penalty under Section 76 of the Finance Act, 1994. Revenue's appeal is to the effect that the penalty under Section 76 is also imposable. In the second Appeal No. S.T./195/09, the appellant has challenged the same Order -in -Appeal and appealed that Service Tax is not payable.

(2.) The facts are that the appellant are a Mandap Keeper and temporarily leased out their premises i.e. Hall, Lawn, etc., for the conduct of ceremonial function like marriages, etc. It was noticed during Audit that the appellant received booking advances from clients. The appellant also received amounts reflected as donation of decoration tender during the period 2004 -05 to 2006 -07. The purpose of donation is to give a certain contractor a monopoly right in their premises to undertake the work of catering and decoration for clients to whom the Mandap Keeper, i.e., the appellant rented out their premises for holding functions. The Commissioner (Appeals) held that the donation received by the appellant is a consideration received as a commission agent and service is provided by them to the decorator under the category of Business Auxiliary Services. The amount received by the appellant from decorator for providing such taxable service is a commission which is liable for Service Tax. Accordingly, he held that Service Tax of Rs. 1,82,550/ - is payable along with interest and equivalent penalty under Section 78.

(3.) THE learned AR appearing for the Revenue reiterates the findings of the Commissioner (Appeals) and states that penalty is imposable under both Sections 76 and 78. According to him, all the decoration and catering work done in the premises which is leased out to clients for conducting functions is to be done through the contractor, who was given a monopoly to do decoration work and who had given donation to the appellant for being granted the monopoly right of decoration. According to him, this act of giving monopoly right for doing decoration work is a service under the category of Business Auxiliary Services defined under clause (iv) of Section 65(19) of the Finance Act, 1994. Clause (iv) defines the service as "any service in relation to procurement of goods or service, which are inputs for the clients and includes service as a Commission Agent". According to him, the appellant is acting on behalf of the decorator and is providing service for consideration.