Final Order Nos. 657 & 658/2007, arising from in Appeal Nos. ST/121-122/2006. Case: Cultural Society of Angamally Vs Commissioner of C. Ex., Cochin. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)

Case NumberFinal Order Nos. 657 & 658/2007, arising from in Appeal Nos. ST/121-122/2006
CounselFor Appellant: Shri Aswin Gopakumar, Advocate and For Respondent: Shri K. Sambi Reddy, JDR.
JudgesDr. S.L. Peeran, Member (J) and Shri T.K. Jayaraman, Member (T)
IssueService Tax, Finance Act, 1994 - Section 67
Citation2007 (13) STT 227, 2007 (8) STR 25 (Tri - Bang)
Judgement DateJune 08, 2007
CourtCEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)

Order:

S.L. Peeran, Member (J), (South Zonal Bench At )

  1. In both these appeals, common question of law and facts are involved and hence, they are taken up together for disposal as per law.

  2. The revenue has proceeded to compute the Service Tax on donations, government grants from among the receipts of rent and other fees collected by the appellants for renting out their auditorium adjacent to society's office. The appellants contention is that they are registered under the Travancore Cochin Literary Scientific and Charitable Societies Registration Act, 1955. They are engaged in providing services to the members of the public such as conducting indoor games, music and dance classes, dance and drama performances, music concerts holding exhibitions of books, handicrafts, neethi melas, and medical camps. For all the social work activities including the Taluk Referral Library set up by State Library Council, they get donation from public which are voluntary and gratuitous payments. The same has no nexus or connection with the rents collected from customers and persons who have taken the premises on rent purposes. However, the authorities have taken a view that the donations and government grants should also form part of the assessable value for levy of Service Tax, which is under challenge. It is not the revenue's case that the appellant have resorted to clandestine collection of rents and charges for letting out the premises in the guise of donations. There are no statements from the persons who have made the admission that the donations were in lieu of the services received by them. Therefore, it is the submission of the appellant that donations received from public as well as persons utilizing the premises including the government grants cannot form the assessable value for levy of Service Tax.

  3. We have heard both sides.

  4. The learned Counsel refers to the judgment of the Bombay High Court rendered in the case of C.K.P Mandal v. CCE, Mumbai-IV 2006 (4) S.T.R. 183 (Bom.) wherein also in a similar circumstance the charges did not form the part of the services, which were ordered to be excluded from the valuation of taxable services for charging Service Tax. He submits that there was no absolute justification for adding these elements in the value of Service Tax.

  5. The learned JDR submits that the donations have been collected in the form of rent. However, on a specific query from the Bench whether there is any admission made by the...

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