Hotel room rent was not taxable as Mandap Keeper Service, and a final assessment could not be reopened.

Hotel room rent recovered from corporate clients was not taxable as Mandap Keeper Service because the invoices and records showed only accommodation charges, with no separate levy for conference hall use. In the absence of any discernible amount attributable to mandap hiring, service tax could not be demanded on the entire room rent. The earlier assessment accepted on a 20% basis, having attained finality between the parties, could not be reopened in later proceedings. Penalty also did not survive, as the billing pattern and payment of other applicable taxes supported a bona fide tax position and the demand itself failed.

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Issues: (i) whether the room rent collected from corporate clients could be treated as taxable value under Mandap Keeper Service; (ii) whether service tax could be demanded on the entire room rent in the absence of separate charges for conference hall usage; (iii) whether the earlier accepted assessment on a 20% basis could be reopened; (iv) whether penalty was leviable.

Issue (i): whether the room rent collected from corporate clients could be treated as taxable value under Mandap Keeper Service.

Analysis: The invoices and supporting records showed only room charges recovered from corporate clients. There was no bifurcation or separate levy for conference hall use, and the appellant had also discharged luxury tax on room rent and VAT on food sales. The activity of providing hotel rooms was distinct from the statutory concept of a mandap, and the earlier Tribunal view that hotel room rent does not fall within Mandap Keeper Service was applicable.

Conclusion: The room rent could not be treated as taxable value under Mandap Keeper Service.

Issue (ii): whether service tax could be demanded on the entire room rent in the absence of separate charges for conference hall usage.

Analysis: In the absence of any identifiable amount charged towards conference hall use, the authorities could not attribute the whole room rent to the taxable service. The records supported the appellant's position that the amounts received were for accommodation and allied hospitality services, not for mandap hiring.

Conclusion: Service tax could not be levied on the entire room rent.

Issue (iii): whether the earlier accepted assessment on a 20% basis could be reopened.

Analysis: An earlier adjudication had fixed a 20% basis for assessment and that order had attained finality between the parties. Once the department had accepted that arrangement, the same issue could not be reopened in later proceedings.

Conclusion: The earlier accepted assessment could not be reopened.

Issue (iv): whether penalty was leviable.

Analysis: The appellant's conduct was supported by contemporaneous billing, payment of other applicable taxes, and a bona fide understanding of the tax position. In light of the substantive failure of the demand itself, penalty could not survive.

Conclusion: Penalty was not leviable.

Final Conclusion: The impugned orders were unsustainable, the service tax demand on room rent did not survive, and the appeals succeeded.

Ratio Decidendi: Hotel room rent cannot be artificially treated as consideration for Mandap Keeper Service unless there is a discernible charge for the taxable mandap activity, and an issue that has attained finality between the parties cannot be reopened.

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