2023 (5) TMI 197 - AT - Service Tax

Levy of Service Tax - Mandap Keeper Service - Complementary Service / Free of charge service - business of running and operating luxury hotel and was duly registered with jurisdictional service tax authorities - Circular No. 96/7/2007 dated 23.08.2007 - HELD THAT - The respondent has not charged separate consideration for providing the conference hall which was provided to the respondent as complementary service. Further, the analysis of the break-up of the corporate billing as provided by the respondent it is clear that no separate consideration was received for provision of conference facilities. Further, through Circular No. 332/82/97-TRU dated 24 September 1997 it was clarified that in case of 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 as the premises are given free of cost - In the case of Dukes Retreat Ltd. 2017 (5) TMI 465 - CESTAT MUMBAI , the division bench of this Tribunal in identical facts held that the assessee is not liable to pay service tax on complementary services of conference hall. There is no infirmity in the impugned order - Appeal dismissed.

Summary

Issues:
The appeal challenges the Order-in-original dropping the demand of service tax for the period October 2004 to 2008-2009 on 'Mandap Keeper Service'.

Facts:
The Respondent, engaged in running a luxury hotel, provided 'Mandap Keeper Service' to various concerns for business conferences. The Respondent offered services like LCD Projector, Mike, and organization of Dance/gazels along with catering services. The Commissioner dropped the demand stating that the use of conference hall was complimentary and not charged for separately.

Contentions:
The Department argued that the demand drop is not sustainable, citing Circular No. 96/7/2007 and stating that the primary business of providing accommodation does not fall under 'Mandap Keeper Service'. The Department highlighted the pre-planned nature of conferences and the extended period of limitation due to alleged suppression of facts by the Respondent. The Respondent contended that the conference hall usage was complimentary, supported by Circulars stating no service tax liability for free services. The Respondent cited various Tribunal decisions favoring the assessee in similar cases.

Decision:
The Tribunal referred to the definition of 'Mandap Keeper Service' and noted that no separate consideration was charged for conference hall usage. Circulars were cited to support the non-taxability of complimentary services. Tribunal decisions, including those upheld by the Supreme Court, were cited to establish that no service tax is applicable on free complementary services. The Tribunal upheld the impugned order, dismissing the appeal of the department.

Conclusion:
The Tribunal upheld the decision to drop the service tax demand on 'Mandap Keeper Service' for the relevant period, based on the non-taxability of complimentary services as established by relevant Circulars and judicial precedents.