Case Law Details
CA Urvashi Porwal
Brief of the Case
In the case of M/s. Narmada Jackson Hotel Vs. C.C.E., Bhopal, it was held that in case of mandap keeper service, the catering charges (cost of buffet dinners) was not entirely excludable from the assessable value and therefore the appellant was eligible only for the benefit of abatement of 40% as per Notification No.12/2001-ST, dated 20.12.2001.
Facts of the Case
The appellant was issued a Show Cause Notice dated 18.09.2006 demanding service tax of Rs.2,94,502/- under “Mandap Keeper” service. The primary adjudicating authority dropped the demand on the ground that the appellant was entitled to the benefit of Notification No. 12/2003-ST, dated 20.06.2003 and thereby catering charges were not included in the assessable value. The Commissioner reviewed the said order and after issue of notice to the appellant held that the catering charges (cost of buffet dinners) was not entirely excludable from the assessable value and therefore the appellant was eligible only for the benefit of abatement of 40% as per Notification No.12/2001-ST, dated 20.12.2001 as amended by notification No. 8/2004-ST dated 09.07.2004. Thus holding the commissioner passed the impugned order.
Contentions of the Assessee
The appellant has contended that in its bills it had separately shown the hall rent and the charges for buffet dinners and has already paid service tax under “Mandap Keeper” service on the hall rent and was entitled to the benefit of Notification No.12/2003-ST as far as the charges for buffet dinners were concerned. It cited the judgement of CESTAT in the case of Sky Gourmet (P) Ltd. Vs. CST [2009 (14) STR 777 (Tri.-Bang)] in its support.
Contentions of the Revenue
The Revenue reiterated the findings in the impugned order and stated that the demand was correctly upheld.
Held by Hon’ble CESTAT
The Hon’ble CESTAT stated that the definitions of Mandap and Mandap keeper given in section 65 (66) and 65 (67) ibid are reproduced below
“(66) “Mandap” means any immovable property as defined in section 3 of the Transfer of Property Act, 1882 (4 of 1882) and includes any furniture, fixtures, light fittings and floor coverings therein let out for consideration for organizing any official, social or business function; 1[Explanation.-For the purposes of this clause, social function includes marriage;]
(67) “Mandap keeper” means a person who allows temporary occupation of a Mandap for consideration for organizing any official, social or business function; 2[Explanation. – For the purposes of this clause, social function includes marriage;]”
It is not in dispute that the appellant is a mandap keeper and provided service in relation to use of mandap. The taxable service defined under section 65 (105) (m) ibid clearly states that “it includes the facilities provided or to be provided to the client in relation to such use and also the services if any provided or to be provided as a caterer”. Thus, the catering provided by the appellant along with the service of use of mandap is clearly covered under the scope of the taxable service. It is worth noting that the buffet dinner charges which the appellant sought to exclude from the taxable value did not represent merely the cost of food the deduction of which it could perhaps legitimately claim under the provisions of Notification No.12/2003-ST. The charges for buffet dinner included not only the cost of food but also the related services like crockery and cutlery, table service, etc. Therefore, the appellant’s claim that the entire charges relating to buffet dinner should be excluded from the assessing value in terms of notification No.12/2003-ST is clearly not sustainable. However, it is also a fact that when the cost of food is included in the overall charges recovered by the appellant which included hall rent and buffet dinner charges it is entitled to the benefit of Notification No.12/2001-ST as amended by Notification No.8/2004-ST and the Commissioner has extended the said benefits and allowed abatement of 40% on the gross value charged by the appellant. The judgement in the case of Sky Gourmet (P) Ltd. Vs. CST (supra) cited by the appellant states that in the outdoor catering service the food supplied should be treated as sale of goods and therefore the same cannot be charged to the service tax. In the present case, the service involved is not outdoor catering service. Also the appellant was seeking deduction of the entire amount of buffet charges from the assessable value under notification No.12/2003-ST instead of seeking deduction of only the cost of food supplied. Thus the said judgement of CESTAT does not come to the rescue of the appellant.
In the light of the foregoing analysis, the impugned order is upheld.
Ms. Urvashi Porwal, Kindly suggest if the assessee has a Benquet Hall in which he is charging Hall Rent + Decoration Service + Catering Service. Whether 40% abatement will apply on all or else ?