2008 (8) TMI 257 - AT - Service Tax

Hotel granted service tax exemption for banquet hall services and food/drink under Notification No. 12/2003

The Tribunal found merit in the hotel's claim for service tax exemption under Notification No. 12/2003 for banquet hall services and food/drinks, staying ... Choice between alternative notifications - applicability of exemption notification to mandap keepers - separate billing and condition for exclusion of food and drinks - prima facie case for grant of stay of recoveryApplicability of exemption notification to mandap keepers - separate billing and condition for exclusion of food and drinks - Whether the assessee could, on the materials before the Tribunal, prima facie claim benefit of Notification No. 12/2003 instead of Notification No. 21/97 for services rendered as mandap keepers. - HELD THAT: - The Tribunal noted that Notification No. 21/97 was issued at a time when services of mandap keepers were taxable and outdoor catering was not within service tax. An amendment introduced w.e.f. 10-9-2004 precluded simultaneous availing of both notifications. The Tribunal observed that because the assessee was raising separate bills for food and drinks, they may not, prima facie, satisfy one of the conditions of Notification No. 21/97 and consequently may not have a choice between the two notifications. The Tribunal also recorded that the Commissioner did not dispute that the assessee satisfied the conditions for Notification No. 12/2003. On this basis the Tribunal reached a prima facie view favourable to the assessee regarding entitlement to Notification No. 12/2003. [Paras 5]Prima facie the assessee may claim benefit of Notification No. 12/2003 and may not satisfy a condition of Notification No. 21/97 due to separate billing for food and drinks.Prima facie case for grant of stay of recovery - choice between alternative notifications - Whether recovery of the demand should be stayed pending disposal of the appeal. - HELD THAT: - Having formed a prima facie view in favour of the assessee on the question of which notification applies, the Tribunal concluded that the assessee had made out a case for waiver of immediate recovery of dues. In consequence and in exercise of its power on the stay petition, the Tribunal stayed recovery of the impugned dues until the appeal is finally disposed of. [Paras 6]Recovery of the dues is stayed till disposal of the appeal.Final Conclusion: The Tribunal took a prima facie view that the assessee may be entitled to benefit of Notification No. 12/2003 (and may not satisfy a condition of Notification No. 21/97 because of separate billing for food and drinks) and accordingly stayed recovery of the impugned dues until the appeal is disposed of. Issues:Interpretation of Notification No. 21/97 vs. Notification No. 12/2003 for service tax exemption in the case of a hotel providing banquet hall services and food/drinks.Analysis:The case involved a hotel providing banquet hall services and food/drinks, claiming service tax exemption under Notification No. 12/2003. The original authority rejected the claim, citing Notification No. 21/97 specific to mandap keepers, imposing a service tax demand of Rs. 58,79,296 and penalties. The advocate argued for the applicability of both notifications, citing Supreme Court decisions in support. The Departmental Representative contended that the specific exemption for mandap keepers under Notification No. 21/97 should prevail.The Tribunal analyzed the issue, noting that Notification No. 21/97 was issued when mandap keepers' services were taxable, while outdoor catering services were not under service tax. The amendment restricting the simultaneous benefit of both notifications came later. Since the applicant billed separately for food/drinks, they might not meet a condition of Notification No. 21/97, leaving no choice between the two notifications. The Tribunal observed that the applicant satisfied all conditions for Notification No. 12/2003, as per the Commissioner's order.Consequently, the Tribunal found prima facie merit in the applicant's case, staying the recovery of dues until the appeal's disposal. The decision highlighted the historical context of the notifications, the conditions for their application, and the specific circumstances of the applicant's services to determine the appropriate exemption.