Hotel property lease not liable for service tax due to exclusionary clause. Appeal allowed.

The Tribunal ruled that there is no liability for service tax concerning the property of a hotel leased out for operation, as it falls under the exclusionary clause and does not amount to an "immovable property" under the taxable service in question. The appeal was allowed, providing consequential relief to the appellant.

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Issues involved:
Liability of service tax under "Renting of Immovable Property" service for a hotel leased out for operation.

Analysis:
The appeal was made against an Order-in-Appeal concerning the liability of service tax under the category of "Renting of Immovable Property" service for a hotel named "Hotel Chandela" leased to a company for operation. The appellant argued that there is a specific exclusion for buildings used for accommodation, including hotels, under Explanation 1 to Section 65(105)(zzzz) of the Finance Act, 1994, making it not taxable under the renting of immovable property service. The advocate for the appellant cited various decisions supporting this argument, emphasizing that buildings used for residential purposes and accommodation, such as hotels, are not covered under the definition of "immovable property." The Revenue, represented by the Departmental Representative, reiterated the findings of the lower authorities.

Upon considering the facts, submissions, and case laws cited, the Tribunal referred to Explanation 1 to Section 65(105)(zzzz) of the Act, highlighting that buildings used for residential purposes and accommodation, including hotels, are not covered under the term "immovable property." Citing precedents, the Tribunal concluded that renting a building for a hotel falls under the exclusionary clause and does not amount to an "immovable property" under the taxable service in question. The Tribunal also referenced a previous case where it was held that leasing/renting of immovable property for a hotel is expressly excluded from the taxable service under Section 65(105)(zzzz).

Based on the discussions and observations, the Tribunal ruled that there is no liability for service tax concerning the property of "Hotel Chandela" leased out for operation. Consequently, the appeal was allowed, providing consequential relief to the appellant.

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