Tribunal Rules Appellant's Room Rent Exempt from Tax

The Tribunal held that room rent collected by the appellant should not be taxed under Mandap Keeper Service based on legal precedents and previous decisions. The demand for the extended period was deemed unsustainable due to past settlements, leading to the setting aside of the impugned order and allowing the appeal on both merit and limitation.

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Issues involved:
Determining liability to pay service tax under Mandap Keeper Service for room rent received from hotel guest.

Analysis:
The appellant argued that accommodation service was specifically brought under service tax from May 2011 and should be applied prospectively. They cited legal precedents, including judgments from the Bombay High Court and the Supreme Court, to support their position. The appellant contended that the definition of Mandap did not cover rooms let out for short-term stays, and previous tribunal decisions supported their stance that room rent for short-term stays should not be taxed as Mandap Keeper service. They also highlighted a past order where the Deputy Commissioner had ruled that room charges do not attract service tax, and the Revenue did not appeal against this decision. The appellant sought cum tax benefit, abatement, and cenvat credit if any service tax was deemed payable.

The Revenue argued that the appellant provided Mandap Keeper Service, including banquet and lodging, and was only paying tax on banquet and food with a 40% abatement. They contended that the appellant should pay service tax on the total value, including room charges, as there was no exemption for room charges under Mandap Keeper Service.

The Tribunal noted that in a previous case involving the appellant, it was decided that room rent should not be taxed under Mandap Keeper Service. Citing various tribunal decisions, the Tribunal reiterated that renting hotel rooms did not fall under the definition of Mandap Keeper Service. The Tribunal also found that the demand for the extended period was not sustainable due to previous settlements on the same facts. Therefore, the impugned order was set aside, and the appeal was allowed on merit and limitation.

In conclusion, the Tribunal held that room rent collected by the appellant should not be taxed under Mandap Keeper Service based on legal precedents and previous decisions. The demand for the extended period was deemed unsustainable due to past settlements, leading to the setting aside of the impugned order and allowing the appeal on both merit and limitation.

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