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Donation received by a Mandap Keeper from decorator/caterer for grant of monopoly rights to provide decoration/catering services not taxable as business auxiliary service.
Facts:
Assessee provided Mandap Keeper’s services by leasing out its hall/lawns for ceremonial functions. Decoration and catering for the hall/lawns was carried out by a contractor. Assessee received donation of decoration tender from caterer/decorator and granted monopoly rights in its premises to a contractor. According to the department, the donation was taxable as Business Auxiliary services provided by it to the decorator.
Held:
The Tribunal considered the definition of “commission agent” as provided under Business Auxiliary service u/s. 65(19) of the Finance Act,1994 and held that commission agent must act on behalf of another person for provision of service. The Tribunal observed that the first appellate authority did not explain as to how the said definition is applicable in the present case and that he did not establish that the appellant while acting as a commission agent was actually acting on behalf of the decorator for providing or receiving service. It was held that the appellant provided the services of Mandap Keeper independently to his clients and decorator provided decoration services to his clients. The two services were independent of each other. The appellant is not acting on behalf of the decorator to provide service to his clients, nor is he acting on behalf of his clients to provide services to the decorator. Therefore, the Tribunal held that the activity of the appellant is not that of commission agent falling under the definition of business auxiliary service.
