MUSLIM EDUCATIONAL Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants, namely, Muslim Educational Association of Southern India (hereinafter referred to as "The Association") is said to be a charitable institution running schools and colleges. There is an auditorium in the premises of NewCollege' belonging to the appellants. During the period 1.10.98 to 29.2.04, this auditorium was allowed to be used by some Members of the Association or their nominees for conducting marriages. These people who used the auditorium paid to the Association what the latter considered as 'donation'. These payments amounting to a total sum of over Rs. 75 lakhs covering the above period were held to be taxable under Section 65 of the Finance Act, 1994 by the department. Accordingly, a Show -cause notice was issued to the Association demanding Service Tax of Rs. 4,26,593/ - for the aforesaid period under Section 73 (1) read with Section 71 of the said Act. The Notice also demanded interest on the tax amount, besides proposing penalties on the Association under various provisions of the said Act. The proposals in the Show -cause notice were contested. The original authority confirmed the demand of tax (with interest thereon) and imposed a penalty on the Association. The appeal filed by the party against the decision of the adjudicating authority was rejected by the Commissioner (Appeals). Hence the present appeal.

(2.) HEARD both sides. Ld. Counsel for the appellants submits that, though the auditorium can be rightly called "Mandap" within the meaning of this term under Section 65 of the Finance Act, 1994 read with Section 3 of the Transfer of Property Act, 1882, the Association cannot be held to be "Mandap Keeper" within the meaning of this terms under Section 65 of the Finance Act. According to ld. Counsel, the auditorium was allowed to be used by the Association members and/or their nominees only during the vacation periods of the educational institution and that no amount was collected from them as consideration for the said facility. All collections were made by way of donations. Further the ld. Counsel submits that even the department has no case that the Association was providing the above facility to its Members and/or its nominees in a professional manner. According to the Hon'ble Supreme Court's judgment in the case of Tamil Nadu Kalyana Mandapam Association v. UOI, , taxable service rendered by Mandap -keepers should of a professional nature. On this basis, ld. Counsel submits that the activity of providing the auditorium for use by members of the Association or their nominees cannot be considered as a 'taxable service' within the meaning of Clause 48 of Section 65 of the Finance Act. Without prejudice to this argument, ld. Counsel has also relied on the Tribunal's decision in CCE, Mangalore v. Krishnapur Mutt, wherein marriages and Brahmopadeshas were held to be religious functions and not to be social functions.

(3.) LD . SDR has also relied on Supreme Court's judgement, in paragraph 50 of which it was held that taxable service could include the mere providing of premises on a temporary basis for organizing any official, social or business function.