1. The appellants filed this appeal against the order-in-appeal passed by the Commissioner of Central Excise whereby the demand of Service Tax is confirmed and penalty Under Section 76 of the Finance Act has been imposed.
2. The appellants are a Municipal Corporation. During the period 1997 to 2002, the appellants provided service of 'Mandap Keeper' which is chargeable to service tax and had not paid the service tax in respect of the services provided by them. Show cause notice was issued to the appellants and the demand was confirmed and penalty imposed.
3. The contention of the appellants is that, they are maintaining certain air-conditioned halls and stadium for organizing various functions, such as, sports, Garbas, educational programme, cultural and religious programmes and official programmes were also organized. The contention is that, they are not running these stadiums and halls for profitable purposes. Being a municipal corporation, they are running the same out of amount received for use of these halls and stadiums.
Therefore, the demand of service tax is not sustainable. The appellants also relied upon the decision of the Tribunal in the case of India Trade Promotion Organisation v. CCE, Delhi-I , whereby the Tribunal held that the activities undertaken by India Trade Promotion Organisation are not covered under the definition of 'Mandap Keeper'.
4. The contention of the Revenue is that, Service Tax is leviable on the services provided by 'Mandap Keeper' and as per the definition Under Section 65 of the Finance Act, 'Mandap' means any immovable property including fixtures let out for consideration for organizing any official or social programme, and the 'Mandap Keeper' is a person who allows temporary occupation of the 'Mandap' for consideration for organizing social, official or business functions. The contention is that, the appellants are receiving considerable amounts for letting out these stadiums and halls to organise various functions which are official or social. Therefore, the demand of service tax is rightly made. The Revenue also submitted that the ratio of the decision of the Tribunal in the case of India Trade Promotion Organisation v. CCE, Delhi-I, supra, is not applicable to the facts of the present case as the Tribunal in that case has held that trade fairs are temporary markets, therefore, is not covered under the service of 'Mandap Keeper'.
5. In this case the demand is confirmed in respect of the amount received for letting out stadiums, halls to organize various social and official functions for consideration. This fact is not denied by the appellants. The definition of covering the services of 'Mandap Keeper' is as under : 65. Definitions - In this Chapter, unless the context otherwise requires - (22) 'mandap' means any immovable property as defined in Section 3 of the Transfer of Property Act, 1882 and includes any furniture, fixtures, light fittings and floor coverings therein let out for consideration for organizing any official, social or business functions; (23) "mandap keeper" means a person who allows temporary occupation of a mandap for consideration for organizing any official, social or business function; (m) to a client, by a mandap keeper in relation to the use of a mandap in any manner including the facilities provided to the client in relation to such use and also the services, if any, rendered as a caterer.
From the reading of the definition, we find that the appellants are letting out Mandap i.e halls, stadiums for consideration for organizing social, official or business functions.
6. We have gone through the facts of the case. In the case of India Trade Promotion Organisation, supra, in paragraph 8 of the judgment, it is held that the Trade Fairs are temporary markets and are not ceremony, therefore, are not covered under the scope of 'Mandap Keeper'. The facts of the present case are different. In the present case, it is admitted fact that the halls and stadiums are let out for consideration for various functions, social and official, such as, sports, Gar-bas, educational programme, cultural and religious programmes and also for holding official functions. In these circumstances, we find no infirmity in the impugned order whereby the demand is confirmed.
7. In respect of the imposition of penalty, the same is imposed Under Section 76 of the Customs Act. The Commissioner (Appeals) in the impugned order held that the appellant is a Statutory Government Body and there cannot be any mala fide intention to evade payment of service tax. It appears to be a case of omission on the part of the appellants.
We find that Section 80 of the Finance Act provides that notwithstanding anything contained in the provisions of Section 76, no penalty shall be imposable on the assessee for any failure referred to in the aforesaid provision, if the assessee proves that there was reasonable cause for the said failure. In the present case, as the appellants were under the bona fide belief that they are not liable to pay Service Tax as they are a Statutory Government Body, we set aside the penalty imposed Under Section 76 of the Finance Act. The appeal stands disposed of in the above terms.