The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand on Andhra Pradesh Technology Services Ltd (APTS) and observed that the activity of letting out ‘computer lab’ not ‘mandap keeper services’.
The Counsel for the appellant submitted that in respect to the demands under the head – Mandap Keeper/ Commercial Coaching, the appellant allowed their Computer Lab to be used by various Government Departments, for imparting training to their employees, through various Institutes like NIIT, APTEC, etc. and collected rental charges from the user Departments, and the same cannot be considered as mandap keeper. The counsel also submitted that there is no mandap keeping services provided by the appellant.
The counsel also pointed out that part of the demand post 10.09.2004, the demand was confirmed under ‘Commercial Coaching or Training Service’ and that the demand under commercial coaching is also incorrect, because APTS does not provide any coaching, they only provide the computer lab and the training itself is provided by other external organizations.
A Two-Member Bench of the Tribunal comprising Anil Choudhary, Judicial Member and AK Jyotishi, Technical Member observed that “At the outset, to qualify under Mandap Keeper services, there must be a service of letting out any immovable property including furniture, fixtures, light fittings etc., and which are let out for consideration for organising any official, social or business functions. From perusal of the records, it is seen that APTS is only providing computer labs to National Institute of Information Technology and other organisations, such as APTEC, who impart training to personnel of the Government and its organisations in computer awareness, it would be highly incorrect to hold that, they are providing ‘Mandap Keeper Services’.”
“From the definition extracted above, ‘Mandap’ means any immovable property, including furniture and fixtures, which is let out for consideration for organising any official or social or business function. According to common parlance and dictionaries, ‘a function’ involves ‘a ceremony’ or ‘a social gathering’. The activity of temporary letting out of ‘computer lab’ for the purposes of training programme is ‘a business activity’ and not a ‘business function’. Hence the activity of letting out the ‘computer lab’ cannot be held to be a ‘Mandap Keeper Services’. Therefore, the demand under mandap keeper cannot sustain” the Bench concluded.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
