Tribunal Upholds Decision: No Service Tax on Complimentary Services

The Tribunal upheld the decision to drop the service tax demand on 'Mandap Keeper Service' for the relevant period, based on the non-taxability of complimentary services as established by relevant Circulars and judicial precedents. The appeal challenging the Order-in-original was dismissed, affirming that no service tax is applicable on free complementary services, as supported by Tribunal decisions and Circulars.

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Issues:
The appeal challenges the Order-in-original dropping the demand of service tax for the period October 2004 to 2008-2009 on 'Mandap Keeper Service'.

Facts:
The Respondent, engaged in running a luxury hotel, provided 'Mandap Keeper Service' to various concerns for business conferences. The Respondent offered services like LCD Projector, Mike, and organization of Dance/gazels along with catering services. The Commissioner dropped the demand stating that the use of conference hall was complimentary and not charged for separately.

Contentions:
The Department argued that the demand drop is not sustainable, citing Circular No. 96/7/2007 and stating that the primary business of providing accommodation does not fall under 'Mandap Keeper Service'. The Department highlighted the pre-planned nature of conferences and the extended period of limitation due to alleged suppression of facts by the Respondent. The Respondent contended that the conference hall usage was complimentary, supported by Circulars stating no service tax liability for free services. The Respondent cited various Tribunal decisions favoring the assessee in similar cases.

Decision:
The Tribunal referred to the definition of 'Mandap Keeper Service' and noted that no separate consideration was charged for conference hall usage. Circulars were cited to support the non-taxability of complimentary services. Tribunal decisions, including those upheld by the Supreme Court, were cited to establish that no service tax is applicable on free complementary services. The Tribunal upheld the impugned order, dismissing the appeal of the department.

Conclusion:
The Tribunal upheld the decision to drop the service tax demand on 'Mandap Keeper Service' for the relevant period, based on the non-taxability of complimentary services as established by relevant Circulars and judicial precedents.

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