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TMI Blog2018 (2) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... duled Property is rented out for running of Hotel, Lodging House and allied/related activities. The Restaurant, Coffee Shop etc., are facilities attached to the business of renting of Hotel. The Lease Deed reveals that rent for each part of the building or in other words, the Rent for Restaurant, Coffee Shop, Permit Room, Bar etc., are fixed separately. Only that part of the building which is used for accommodations would fall within the exclusion part of the definition. It is not the case that the restaurant coffee shop, permit room/banquet hall etc., are fully available only for the exclusive use of the lodgers, who stay in the hotel. It is also not the contention that these facilities are not open for use by those who do not stay in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and pays a total rent of per month. The lease agreement was entered into on 08.05.2003, fixing the rent for lodging House as ₹ 1,50,000/- for Restaurant ₹ 20,000-; for Coffee Shop ₹ 20,000/-; for Banquet Hall ₹ 10,000/-; and for Permit Room ₹ 10,000/-. She submitted that as per sub-clause (d) of Clause (4) of section 65(105)(zzzz), a building used solely for residential purpose and building used for the purpose of accommodation, including hotels, hostels, bar houses, holiday accommodation, tents, camping facilities are excluded, and does not amount to an Immovable Property falling within the ambit of taxable services of Renting of Immovable Property . It was submitted by her that the Restaurant, Coffee Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uet hall etc., the same cannot be considered as immovable property used for accommodation. Therefore, as per Explanation 2, such immovable property used for purposes other than accommodation would fall within the definition of taxable services , as provided in section 65(105)(zzzz) of the Act. 4. Heard both sides and we have gone through the facts. 5. The issue involved is whether appellants are eligible for the refund of service tax paid under the category of Renting of Immovable Property Service. The main ground on which the service tax has been rejected is by holding that building that comprises of a lodging house also has a restaurant, banquet hall etc., and, therefore, would not fall within the meaning of hotel. On perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Permit Rooms (Bars) etc., and in the operation of any Infrastructures, Accessories, Equipments OR Facilities provided in the Hotel, the LESSEE shall be wholly and entirely responsible for compliance with all applicable Laws, Rules, Regulations, Administrative Orders or Public Bodies OR Authorities, Judicial Orders and any conditions of Licence or Sanction and the LESSEE shall ensure strict compliance thereof, not exposing the LESSOR to any contravention, penalty OR default whatsoever and the LESSEE shall keep further the LESSOR indemnified, protected and harmless against any disregard, violation, non-observance breach OR contravention thereof and any Proceedings therein OR any damages, penalties, expenses or costs relating thereto. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given my careful consideration to the fact of the case and the points putforth in the grounds of appeal and the discussions had at the time of personal hearing. The main issue to be decided in this case is whether the service tax paid by the appellant is covered under section 65(105)(zzzz) of Finance Act, 1994 or not. The appellant's contention is that he need not pay service tax on the service of Renting of Immovable Property Service as his service is covered under the exemption category and, therefore, the amount of ₹ 76,778/- paid by on the said service has to be refunded to him. As per Explanation 1 (d) to the section 65(105)(zzzz) of the Finance Act, 1994, building used solely for residential purposes and buildings used for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty in question is inadmissible and the service tax paid is correct. Moreover, the appellants have entered into a common lease agreement with the lessee. The department has clarified vide Circular Vide M.F. (D.R) Letter D.O.F. No.334/1/2007-TRU, dated 28.02.2007 [2007 (5) S.T.R.C.27] that renting of Immovable Property for use in the course or furtherance of business or commerce is taxable service and where renting of Immovable Property is singly composite contract involving part of property for use in commerce business and part of it for residential/accommodation purposes, for the purpose of levy of service tax under this sub-clause, entire property under the contract is treated as property for use in commerce or business and accordingly th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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