Issue:- Whether room charges collected for rooms let out along with conducting conferences includible under Mandap keeper service?

PJ/Case Law/2013-14/2111

Case:-SANJAY ELECTRICAL Vs COMMISSIONER OF SERVICE TAX, NOIDA

Citation:- 2014-TIOL-340-CESTAT-DEL

Brief facts:- The appeal and stay petition were directed against Order-in-Original No. 06/RKS/ST/P-I/2013 dated 09/03/2013 passed by the Commissioner of Central Excise, Pune -I. Vide the impugned order a service tax demand of Rs. 1,11,85,317/- had been confirmed against the appellant M/s. Dukes Retreat Ltd. for the period 2007-08 to 2011-12 (up to April 2011) under the category of Mandap Keeper Service along with interest thereon apart from imposing penalties under the provisions of Finance Act, 1994. Aggrieved of the same the appellant was before Tribunal.

Appellant’s contentions:- The learned Counsel for the appellant submitted that the demand in this case had been made in respect of the room charges collected by the appellant for renting out the premises for conducting conferences etc. Service tax on room charges came into effect only on 01/05/2011 and, therefore, for the period prior to 01/05/2011 they were not liable to pay service tax. He further submitted that in the appellant's own case, for the previous period, this Tribunal had granted stay vide order NO. S/549-550/2006/CSTB/CI dated 29/06/2006 in respect of the demands pertaining to the period July, 1998 to March, 1999. He further relied on the decision of this Tribunal in the case of Rambagh Palace Hotels Pvt. Ltd. vs. Commissioner of Central Excise, Jaipur = (2012-TIOL- 673-CESTAT-DEL) wherein it was held that value of room charges booked for the purpose of marriages, conferences, etc was not includable in the Mandap Keeper Services and renting out hotel rooms does not fall within the purview of Mandap Keeper Service. In view of these decisions, he prayed for grant of stay.

Respondent’s contentions:- The learned Additional Commissioner (AR) appearing for the Revenue, on the other hand, rebutted the contention of the counsel for the appellant. He submitted that the appellant had rented out the premises for conducting conferences, etc. including catering and, therefore the entire activity would come within the purview of Mandap Keeper service and therefore, even in respect of the room charges the levy of service tax under the Mandap Keeper Service would apply and, therefore, he pleaded that the appellant be put to terms.

Reasons of judgment:- We had carefully considered the submissions made by both the sides. Considering the fact that, in appellant's own case, for the previous period, this Tribunal had granted unconditional waiver from pre-deposit of the service tax liability on room charges and also considering the decision of this tribunal in the case of Rambagh Palace Hotels Pvt. Ltd. (supra), the appellant had made out a prima facie case for grant of stay. Accordingly, we grant waiver from pre-deposit of the adjudicated liability and stay recovery thereof during the pendency of the appeal.

Decision:- Stay was granted.

Comment:-The issue of inclusion of room charges with respect to rooms given along with conducting conferences or organising marriages has been decided in favour of the assessee in the case of Rambagh Palace Hotels Pvt. Ltd. (2012-TIOL-673-CESTAT-DEL). Accordingly, stay application was allowed because prima facie the value of room charges is not includible in the value of mandap keeper services.

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PJ/Case Law/2013-14/2111

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