ORDER
S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal No. 16/2004 dated 6.2.2004 confirming Service Tax under the category of Mantap Keepers as defined under the Section 65 of Finance Act. The appellant is a non-commercial auditorium, which is let-out on nominal charges for activities as defined under the category of Mantap Keepers. The appellants took the plea that although they are a Government Department they cannot be brought under the category of Mantap Keepers. Theirs was a non-commercial auditorium and was let-out for nominal charges for cultural activities only. However, the Commissioner (A) noted that there is no exemption granted to the appellants and the activity of letting-out the auditorium for various social events is covered under the category of Mantap Keepers.
2. The appellants have not responded to today’s notice of hearing, despite several adjournments given to them. The matter was also dismissed for non-compliance and latter restored on an application filed by them. The appellants have not appeared for almost 11/2 years and the matter has been adjourned time and again. The appellants were given as last chance to argue the matter yet they have not appeared to argue the matter.
3. The learned JDR relied on the ruling of this Bench rendered in the case of “The Secretary, Town Hall Committee, Mysore City Corporation Mysore and Kalamandir, Dept of Kannada & Culture, Government of Karnataka, Mysore” by Final Order No. 720 and 721 dated 29.6.2007 wherein this bench has upheld the levy of Service Tax to the type of activities for which the appellants let-out the Town Hall and Kalamandir. He submits that the ratio would apply to the facts of this case. To a specific query as to whether the appellants were letting-out for any public functions which are exempted and not covered by the Act as stated in the cited judgment, the learned JDR submitted that the appellants have not claimed any such exemptions and therefore, the citation would apply on all fours.
4. We have carefully considered the submissions and we notice that the definition of Mantap Keepers has been analyzed and demands in terms of such a definition have been upheld in the cited Final Order No. 720 and 721/2007 dated 29.6.2007. The findings recorded in Par 5 to 5.4 are reproduced herein below.
5. We have gone through the records of the case carefully. The first appellant rents out the Town Hall for the following purposes:
– Social drama arid school functions
– Mythological/Historical drama or Night programmes
– Clubs/Associations & other commercial programmes
– Public function
– Kannada Film Shooting
As regards the second appellant, the Kalamandir is hired out for cultural programmes like dance, drama and promotion of Kannada language. The learned Advocate vehemently argued that there is a distinction between ‘cultural event’ and ‘social function’. According to him, in social functions, them is a meeting of known people. He has given the examples of marriage, house warming ceremony, kitty party, birthday party, etc. He has also referred to the Explanation inserted in the Finance Act. The Explanation reads as follows:
Explanation:- For the purpose of this clause, ‘social function’ includes ‘marriage’.
The learned Advocate has come to the conclusion that social function, as far as the Finance Act 2007 is concerned, means only marriage and similar functions. We are afraid that the above conclusion is not correct. The explanation says that social function includes marriage. Since it is an inclusive definition, social function is not restricted to marriage alone. Therefore, to say that in view of this explanation, this Bench’s decision in the case of ADA Randamandira is no longer good law, is not correct. The explanation inserted on 11.05.2007 cannot nullify the reasoning adopted in the ADA Randamandira decision.
5.1. Let us reproduce the definition of “Mandap keeper”.
Mandap Keeper’ means a person who allows temporary occupation of a mandap for consideration for organising any official, social or business function.
5.2. In the present appeals, the points at issue is whether the services rendered by the appellants come under the category of ‘Mandap Keeper’ as per Section 65 of the Finance Act, 1994. The dispute narrows down to the interpretation of the term ‘social function’ used in the definition of ‘Mandap keeper’. A mandap can have various uses. We appreciate the argument of the learned Advocate that for bringing the services of Mandap Keeper into the Service Tax net, the purpose for which the Mandap has been given on rent is to be examined. A mandap may be given on rent for selling certain items or for an exhibition. By no stretch of imagination, these activities can come within the purview of official, social or business functions. Therefore, it is very necessary to examine the purpose for which the mandap is given on rent In such circumstances, each case has to be examined on the basis of the facts at hand and it may not he correct to generalize. We have already enumerated in the present appeals, the purposes for which the Town Hall/Kalamandir we given on rent. The learned Advocate makes a fine distinction between ‘cultural event’ and ‘social function’. According to him, organizing a dance or drama cannot be called as organizing a social function. In his view, the meaning of social function cannot be stretched to include what the legislature has not intended. In the Rangamandira decision, relying on the Board’s clarification of 1997, we held that programmes of dance, drama and music are social functions. According to the Oxford Advanced Learners Dictionary, ‘function’ means ‘a social event or official ceremony’. The term ‘social function’ is very comprehensive. Cultural events are only a subset of social functions. In our view, any cultural event would also be considered as a social function. In a social function like dance or drama, many people attend for watching the programme. We cannot say that there is no meeting of minds. The learned Advocate wants to restrict the scope of function only to certain ceremonies like marriage. We are afraid that there is no justifiable reason for limiting the scope of the term ‘social function’ in such a manner. The appellants hired the Mandap for cultural functions only on commercial consideration. The explanation inserted includes marriage as a social function for the purpose of levy of Service Tax on the Mandap Keepers. It does not mean that if the mandap is hired for other purposes there would not be any levy of Service Tax. The Board, in its Circular of 1997, has clearly brought out the reasons for considering dance drama, music etc. as social functions. The term ‘social’ means relating to a group of people or society. In all cultural functions, society is involved. We can do no better than reproduce Board’s clarification with which we are in agreement.
Query: Whether service tax is attracted in cases where premises and/or connected facilities are Set out on rent to clubs and cultural organisations for the purposes of holding programmes relating to Dance, Drama & Music?
Clarification: The answer lies in the affirmative. The contention that holding a dance, drama or music programme it is not a special function is not tenable. Culture is an inalienable element of a civilised society and is an integral part of our social ethos and is in fact a form of social intercourse Programmes of dance, drama and music are social function. In case rental is being charged by the owner or caretaker of any premise for holding such functions, they are liable to pay service tax. Apparently, such renting out of premises is for a monetary consideration and thus has a pecuniary aspect. In case no charges/rental is being paid i.e. the premises are given out free of cost to hold such function, there would be no service tax liability.
5.3. As regards Kannada film shooting and political meetings, it is very clear that they cannot be considered as social functions. Therefore, such instances have to be excluded from the levy of Service Tax in the category of Mandap Keepers.
5.4. Both the appellants have urged that the invocation of longer period is riot justified, as they were under the bona fide impression that their activities would not come within the purview of Service Tax under the category of Mandap Keeper. We are in agreement with the contention of the appellants. Therefore, the demand will be restricted to the normal period. As the issue involves question of interpretation of law, no penalty is warranted. We set aside the penalties. The appeals are allowed partially in the above terms. We uphold the levy of Service Tax on the appellants. However, the demand will be restricted to the normal period.
5. We find that the appellants have not taken any plea that one of the activities as defined under the Mantap Keepers are not being carried out by them. Despite several opportunities given to the appellants to establish their case, they have not come forward to discharge their onus on them. We find that in terms of the allegations made, the assessee is carrying on the activities of the Mantap Keepers and such an activity is akin to the activity carried out by the Town hall, MCC, Mysore and Kalamandir, Department of Kannada and Culture, Government of Karnataka, as upheld by this Bench by Final Order No. 720 & 721/2007 dated 29.6.2007. The findings are reproduced above. The findings are clearly applicable to the facts of this case. Applying the ratio of this judgment, we find no merit in this case and we dismiss the same.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)