Commissioner of Central Excise vs Town Hall Committee, Mysore City Corporation

N. Kumar, J.—This appeal is by the revenue challenging the order passed by the Tribunal which set aside the penalty on the ground that issue involved relates to interpretation of law.

This appeal arises out of a common order passed in two cases. Town Hall Committee, Mysore City Corporation, is one Assessee and Kalamandir, Department of Kannda and Culture, Mysore, is another Assessee. The Town Hall is let out for cultural functions and organizing of political events. Kalamandir is provided for organizing various functions, events and activities on temporary basis. The revenue proceeded against both of them for non-payment of service tax under the category of Mandap Keeper. They were levied service tax. Aggrieved by the same, they preferred an appeal to the Commissioner of Appeals, who upheld the order of levying service tax. It is against the said order the Assessee has preferred an appeal before the Tribunal. The Tribunal by a detailed order, held that certain activities for which these accommodations are made available cannot be considered as a social function and therefore no service tax is payable thereon. However, it treated these premises as Mandap Keepers and held that service tax is liable to be paid. As they were under a bona fide impression that their activities would not come within the purview of service tax under the category of Mandap Keepers, they did not pay tax. Therefore, the demand was restricted to the normal period as there was a bona fide dispute regarding the liability to pay service tax. The Tribunal set aside the penalty imposed. Aggrieved by the said order, the revenue is in appeal insofar as setting aside of the penalty imposed.

From the aforesaid material it is clear that both the Assessees are public authorities. The premises are given for social functions, public functions, cultural functions and political functions and the basis of which, they cannot be said to be Mandap Keepers and they should not be construed as Mandap Keepers. However, the Tribunal on careful consideration of the relevant provision has come to the conclusion that both the Assessees fall under the category of Mandap Keepers. In those circumstances, it cannot be said that service tax was deliberately avoided by them. Therefore no case for imposition of penalty is made out as the cause shown by them is reasonable one and the Tribunal was justified in setting aside the penalty. We do not see any justification to interfere with the well considered order passed by the Tribunal. No merit. Dismissed.