Tribunal excludes event room rentals from Mandap Keeper Service tax calculation

The Tribunal ruled in favor of the appellant, holding that renting charges for rooms booked for events should not be included in the value of Mandap Keeper Service for service tax calculation. The Tribunal found that renting hotel rooms for temporary stays, not for functions, does not align with the Mandap Keeper definition. Consequently, the appellant's appeal was allowed, and the invocation of the longer period of limitation was not sustained, leading to the appellant being granted consequential relief.

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Issues:
1. Whether the renting charges for rooms booked for events should be included in the value of Mandap Keeper Service for service tax calculation.
2. Whether the longer period of limitation can be invoked due to alleged suppression of facts by the appellant.

Analysis:
1. The appellant was engaged in providing Mandap Keeper and Convention Service, having discharged service tax on banquet charges but not on room charges booked for events. The Revenue contended that room charges should be included in the value of mandap keeper service. The Commissioner (Appeals) upheld this view, stating that renting rooms for events falls under Mandap Keeper Service. However, the Tribunal in a precedent decision (Merwara Estates v. C.C.E., Jaipur) held that hotel rooms' renting is distinct from Mandap Keeper activity as hotels have a separate identity. The Tribunal found that providing hotel rooms for temporary stays, not for functions, does not align with the Mandap Keeper definition. Thus, the lower authorities' decision was deemed unsustainable, and the appeal was allowed in favor of the appellant.

2. The Commissioner (Appeals) also upheld the longer period of limitation invocation due to the alleged suppression of facts by the appellant regarding room charges. However, the Tribunal's decision to set aside the inclusion of room rent in Mandap Keeper Service value also nullified the basis for invoking the longer period of limitation. As the Tribunal ruled in favor of the appellant on the primary issue, the invocation of the longer period of limitation was not sustained. Consequently, the appellant was granted consequential relief due to the allowance of the appeal.

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