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TMI Blog2019 (1) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice by Section 65(105)(zzzzw) vide Explanation 1(d) which excluded building used for the purpose of accommodation including hotels/hostels, etc. The Hon’ble High Court of Delhi and Kerala in various decisions have held that levy was covered by Entry 62 of List II of VII Schedule of the Statute relating to luxury tax which the appellants are paying in the present case - Revenue has not been able to bring on record any evidence to show that the appellants are charging service tax on convention service. The impugned order is not sustainable in law - appeal allowed - decided in favor of appellant. - ST/117/2009-DB - Final Order No. 20003/2019 - Dated:- 2-1-2019 - SHRI S.S GARG, JUDICIAL MEMBER And SHRI P. ANJANI KUMAR, TECHNICAL MEMBER Mr. K.S. Ravi Shankar, Advocate For the Appellant Dr. K. Ezhilmathi, Joint Commissioner (AR) For the Respondent ORDER Per: S.S GARG The present appeal is directed against the impugned order dated 19.12.2008 passed by the Commissioner of Service Tax whereby the Commissioner has confirmed the demand of ₹ 1,07,57,831/- under Section 73(2) of the Finance Act, under the category of Convention Services for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der is not sustainable in law as the same is contrary to the facts, laws and evidence. He further submitted that the Commissioner has failed to appreciate that during the relevant period, there was no levy whatsoever on room tariff collected for food/beverages sold as a result of letting short term accommodation by hotels, inns, guest houses, clubs and camp sites by whatever name called. He also submitted that such activity came under the service tax net only after 1.5.2011 by virtue of Section 65(105)(zzzzw) inserted by the Finance Act, 2011. It is his further submission that the said amendment was challenged before the Delhi High Court in the case of Federation of Hotels and Restaurant Association vs. UOI: 2016 (44) STR 3 (Del.) and the Hon ble High Court in para 77 struck down Section 65(105)(zzzzw) of the Finance Act, 1994 levying service tax on short term accommodation renting and also quashed the Government circulars thereon as unconstitutional and invalid. The High Court held that the said levy was covered by the Entry 62 of List II of VII Schedule of the constitution relating to luxury tax. The appellant also relied upon the decision of the Kerala High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. CCE: 2013 (31) STR 480 (T) CCE vs. Chokhi-Dhani Resorts Pvt. Ltd.: 2017 (50) STR 168 (T) 5. On the other hand, the learned AR defended the impugned order. 6. After considering the submissions of both the parties and perusal of the material on record, we find that appellant is running an international golf resort and star hotel with various facilities and these rooms are let-out to employees of corporates who pay room tariff and use facilities for outing and formal meetings. These corporates are also allowed to use the mandap and conference facilities free of charges on complementary in order to attract customers as was stated by the General Manager Shri Mathew during the course of investigation. Further, we find that appellants have produced the bills which have been issued to various customers during the impugned period and we find that appellants have not charged any tariff for conference halls and they have only charged for renting of the rooms. Further, we find that the hotels are totally kept out of renting of immovable property service by Section 65(105)(zzzzw) vide Explanation 1(d) which excluded building used for the purpose of accommodation includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x cannot be levied on the same value. In the impugned order, the Commissioner (Appeals) has recorded the findings that the supply of food and beverages is not an activity ancillary to the primary activity of convention service. We uphold the view of the Commissioner (Appeals) in this regard. The payment of VAT indicates that supply of food is an independent activity, whose value cannot be included in the value for convention service. This view also finds support in the decision of the Tribunal in the case of Daspalla Hotels Ltd. - 2010 (18) S.T.R. 75 (T-B), wherein it is held by the Tribunal that the cost of food and beverages is excludible from the value for the purpose of charging service tax under convention service in terms of Notification No. 12/2003-S.T. Para 4 of the said decision is reproduced below :- 4. In the instant case, the appellants have produced evidence to substantiate their claim that they have paid value added tax on the value of food and beverages sought to be taxed under convention service, vide the impugned order. In the light of the constitutional provisions relied on by the Tribunal in Sky Gourmet Pvt. Ltd. case (supra) and the ratio thereof to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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