2014 (1) TMI 1370 - AT - Service Tax

Convention service - Room renting - Held that - Renting of hotel rooms cannot be held to be covered by the definition of Mandap Keeper inasmuch as the hotel has an identity, personality and function quite distinguishable from that of a mandap. In any case, we find that the activity of giving hotel rooms to the customers, who might organize function in the hotel is an activity entirely different from the Mandap Keeper activity. The definition of Mandap Keeper nowhere covers the temporary occupation of hotel rooms for the purpose of boarding and temporary residence. It is not disputed that no function is held in the hotel room which is used for the purpose of staying in the same - issue decided in the case of Mandap Keeper Service is equally applicable to convention service also stands covered by the earlier order of Commissioner (Appeals) as also by the Tribunal s decision in the case of Rambagh Palace Hotels Pvt. Ltd. 2013 (12) TMI 556 - CESTAT NEW DELHI - Stay granted.

Summary

Issues:
1. Whether room rent and charges for food provided to participants should be included in the value of convention service for the purpose of Service Tax.
2. Applicability of earlier order of Commissioner (Appeals) and Tribunal's decision in a similar case to the present situation.

Analysis:
1. The judgment confirms a demand of Service Tax against the appellant for not including room rent and charges for food provided to participants in the value of convention service. The Revenue initiated proceedings for recovery of the tax short paid by the appellant, resulting in the confirmation of the demand along with interest and penalty. The appellant, registered for providing convention services, argued that since the bills for room rent and food were raised separately, they should not be considered part of the value of convention service. The appellant relied on an earlier order of Commissioner (Appeals) which set aside a similar demand. Additionally, the appellant cited a Tribunal decision in the case of Rambagh Palace Hotels Pvt. Ltd., emphasizing that renting hotel rooms for staying purposes is distinct from the Mandap Keeper service, thus such charges should not be included in the service tax.

2. The Tribunal, after considering the arguments and the impugned order, agreed with the appellant's submissions. Referring to the earlier order of Commissioner (Appeals) and the Tribunal's decision in the Rambagh Palace Hotels case, the Tribunal found that the issue of including room rent and food charges in the value of convention service is akin to the Mandap Keeper service issue. Citing the Tribunal's decision in a similar case, the Tribunal held that the appellant is eligible for unconditional stay and granted a waiver of pre-deposit of dues arising from the impugned order for the admission of appeal and stay collection of such dues during the pendency of the appeal.

In conclusion, the judgment clarifies the treatment of room rent and charges for food provided to participants in the value of convention service for the purpose of Service Tax. It highlights the importance of separate billing and distinguishes between services like Mandap Keeper and hotel room rentals. The Tribunal's decision provides relief to the appellant based on the applicability of earlier orders and legal principles established in similar cases.