Hotel owners exempt from service tax on renting property for hotel use; consideration treatment remanded for ledger review.

The Tribunal ruled in favor of the appellants, owners of hotel buildings, stating they were not liable to pay service tax on renting immovable property for hotel use. However, a separate issue arose regarding the treatment of consideration as cum-tax for another property, leading the Tribunal to remand the matter for further examination of the ledger to determine if the tax amount had been received from customers.

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Issues:
1. Service tax liability on renting of immovable property for hotel use.
2. Discharge of tax liability on renting of immovable property and treatment of consideration as cum-tax.

Analysis:
1. The appellants, owners of hotel buildings rented to a hotel company, were facing service tax proceedings initiated by the Revenue. The issue was whether they were obligated to pay service tax on renting of immovable property. Referring to a previous case, the Tribunal held that leasing/renting of immovable property for a hotel is excluded from taxable services under Section 65(105)(zzzz). Consequently, the Tribunal ruled that the appellants had no tax liability for service tax on the activity.

2. Apart from the above issue, there was an additional demand in another case related to renting of immovable property for another premises. The appellants had discharged their tax liability on this activity but treated the entire consideration as cum-tax. The Revenue contended that the cum-tax benefit should not be available to the appellants since they had claimed tax from their customers. The appellants argued that although they received the tax amount from customers, they had not paid it, as evidenced by their ledger. The Tribunal remanded the matter to the Original Adjudicating Authority to examine the ledger and verify the claim that the tax amount had not been received from customers, instructing a re-decision based on the findings.

In conclusion, the Tribunal ruled in favor of the appellants regarding the service tax liability on renting of immovable property for hotel use. However, a separate issue arose concerning the treatment of consideration as cum-tax, which required further verification based on the appellants' ledger.

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