The event was an individual, using the Standard American Yellow Card (SAYC) as the required system. Were ACBL regulations in effect? I'll presume so for the moment, where it matters.
3!S is a cue bid by definition ("a bid in a suit bid or shown by an opponent"). A control bid (historically "control showing cue bid", but TPTB now define it as just "control bid") is "a bid, not intended as a place to play, which denotes a control (usually first or second round). The control need not be in the denomination named. These bids are used to investigate slam." Usually one does not make a control bid unless their side has a known fit. So logically this is a cue bid, but not (at least, not yet) a control bid. What does it mean? SAYC does not define it in this auction, but it does make the general statement "A cuebid overcall when the opponents have bid only one suit is a Michaels cuebid, showing a 5–5 two-suiter (or more distributional). If the opening is in a minor suit, the cuebid shows the majors; if the opening is in a major, the cuebid shows the other major and an unspecified minor." That might apply in this auction, and it might not. SAYC doesn't seem to think opponents will ever interfere after a 2!C opening.
OP asked the meaning. He was told "it's a cue bid. If you don't know what a cue bid is, go read a bridge book." It's not clear whether the second sentence occurred at the same time as the first, or after OP sought further clarification. Either way, the response is wrong on two counts: "it's a cue bid" is not adequate disclosure, and the second comment is rude and a violation of Law 74A1, 74A2, and the ACBL's Zero Tolerance policy.
The director apparently decided on his own what the bid means, and informed OP that it's "cue bid not only michael, its different. He just showed short in spade and ask to his partner for bid excepting of spade". This seems to mean "it's for takeout", which is still not adequate disclosure, and besides, it's not up to the TD to explain the opponents' methods. Also, if 3!S is takeout, what's double? Penalty?
I think the director's ruling was inadequate and incorrect in law. However we're not told what the rest of the auction was, or the table result, or what the other three hands were, or whether the TD considered whether there was damage, so I'm not going to speculate on whether the score should be adjusted. I will say that the director should have given the player who said "go read a bridge book" a disciplinary penalty of 25% of a top.
I suspect that the correct explanation of 3!S is "undiscussed but over a one level opening 2!S would show hearts and a minor, 5-5 or better, any strength (or perhaps 'weak or very strong', I'm not sure how SAYC plays it)". I also think that if the 3!S bidder intended it as "takeout" as the director claimed, he screwed up — why would his partner have any reason to expect that? IAC, if I were North, and 3!S came round to me, I'd double. If West bid something, I'd bid however many spades I need to bid to buy the contract.