Tribunal grants waiver for Service Tax & penalty in hospitality industry case

The Tribunal granted the stay petition, waiving the pre-deposit of Service Tax and penalty totaling Rs.95.93 Lakhs. The Applicant, in the hospitality industry, provided 'rent a cab service' through travel desks in their hotels without markup. The Tribunal found that the services were actually provided by another entity within the Applicant's premises, which had already paid Service Tax. Additionally, the Tribunal held that Service Tax was not leviable for services to the Applicant's own divisions, citing precedents. As a result, the Tribunal allowed the waiver based on these arguments and evidence presented.

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Issues:
- Application seeking waiver of pre-deposit of Service Tax and penalty.
- Service Tax demand related to 'rent a cab service' and services to other divisions.
- Applicability of Service Tax for services provided to own division.

Analysis:
The judgment pertains to an Application for waiver of pre-deposit of Service Tax amounting to Rs.95.93 Lakhs and a penalty under Section 78 of the Finance Act, 1994. The Applicant, in the hospitality industry, operated travel desks in their hotels that provided 'rent a cab service' to customers, with charges included in room rent without markup. The Applicant argued that a significant portion of the demand pertained to this service. The Ld. Sr. Advocate referred to sample bills from M/s. International Travel House Ltd. to demonstrate the billing process. Additionally, the Applicant contended that no Service Tax was leviable for services rendered to their own divisions, citing precedents like Precot Mills Ltd. and Indian Oil Corporation Ltd.

The Ld. A.R. for the Revenue supported the findings of the Ld. Commissioner. However, the Tribunal, upon reviewing the sample documents, observed that the 'rent a cab services' were actually provided by M/s. International Travel House Ltd., stationed within the Applicant's premises. The Tribunal noted that the invoices from the travel house mentioned the Service Tax Registration Number, indicating that Service Tax had already been paid. The Ld. Advocate assured that proof of payment of Service Tax by the travel house could be provided. Regarding services to own divisions, the Tribunal referred to previous judgments stating that services cannot be provided to one's own division. Consequently, the Tribunal found a prima facie case for total waiver of the adjudged dues, leading to the waiver of pre-deposit and stay on recovery during the appeal's pendency.

In conclusion, the Tribunal granted the stay petition, allowing the waiver of pre-deposit of Service Tax and penalty, based on the Applicant's arguments regarding the 'rent a cab service' and services provided to their own divisions, supported by relevant precedents and documentary evidence.

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