2017 (6) TMI 512 - AT - Service Tax

Mandap Keeper Services - the hotel rooms hired by the persons at the time of hiring the mandap/garden area to conduct marriage etc - taxability - Held that - similar issue decided in the case of M/s. Taj Hari Mahal Versus C.C., Jaipur And (Vice-Versa) 2017 (4) TMI 948 - CESTAT NEW DELHI , where Tribunal has held that letting out of the rooms in the hotel cannot be included in the Mandap Keeper Services for service tax liability - appeal allowed - decided in favor of appellant.

Summary

Issues: Liability of service tax on room rents booked for wedding ceremony under "Mandap Keeper Services".

In the present case, the appellants, engaged in providing taxable services under the category of "Mandap Keeper Services," were disputing the liability to pay service tax on considerations received towards room rents for rooms booked in connection with a wedding ceremony. The Revenue contended that the room rents should be added to the value of taxable services under the category of "Mandap Keeper Services." The lower authorities confirmed a service tax liability of &8377; 44,07,586/- along with penalties under Section 76 and 78 of the Finance Act, 1994. On appeal, the Commissioner (Appeals) upheld the original order, except for setting aside the penalty imposed under Section 76.

The appellant's counsel argued that they had already paid service tax on considerations received for renting the marriage garden under "Mandap Keeper Services." They maintained that renting out rooms in their hotel for temporary guest occupation should not be taxed under the same category, even if some rooms were occupied by guests attending the marriage. They emphasized that renting out the marriage garden was a distinct activity from renting out hotel rooms temporarily. The counsel relied on previous Tribunal decisions with similar facts to support their stance.

After hearing both sides and reviewing the appeal records, it was noted that a previous Tribunal decision had ruled that letting out hotel rooms cannot be considered part of "Mandap Keeper Services" for service tax liability. The Tribunal found that the reasons given by the lower authorities for including room charges in the taxable value were unfounded. Referring to the precedent set in the case of Rambagh Palace Hotels Pvt. Ltd. Vs. Commissioner of Central Excise, Jaipur, the Tribunal emphasized the distinction between the activities of a mandap keeper and a hotel providing temporary accommodation. The Tribunal concluded that the impugned order was not sustainable and set it aside, allowing the appeals of the appellant-assessee while dismissing the Revenue's appeal. The cross objection was also disposed of accordingly.

Based on the cited decision's ratio, the Tribunal found the impugned order to be without merit and subsequently set it aside, allowing the appeal.

[Order dictated & pronounced in open court]