TaxTMI 
TaxTMI 
2023 (5) TMI 808
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....nfirmed at (i) above; (iii) I do not impose any penalty under Section 77 of Finance Act, 1994; (iv) I impose penalty of Rs. 13,48,706/- (Rupees Thirteen Lakhs Forty-eight Thousand Seven Hundred and Six only) on the assessee, i.e. EIH Ltd. Unit Trident BKC, under the provisions of Section 78(1) of Finance Act, 1994; (v) In terms of Clause (ii) of the Second proviso to Section 78(1) of the Finance Act, 1994, the assessee will have the benefit of reduced Penalty of 25% as imposed at (iv) above, if the entire Service Tax and interest as confirmed above as well as such reduced penalty is also paid within 30 days of the receipt of this order. 2.1 Appellant holding Registration No.AABCB0266D001, is engaged in the business of providing Accommodation and Restaurant Service. 2.2 During the course of audit of the records of the appellant for the period April 2011 to March 2015, it was observed that the appellant had recorded income under the Head 'Room Charge Retention' on cancellation of accommodation by their customers during the years 2012-13 to 2015-16. As per the appellant, this income is generated on account of non-occupation of the room by the customers on the booke....
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....rder. 2.5 Aggrieved appellant have filed this appeal. 3.1 I have heard Shri Jay Chheda, Advocate for the Appellant and Shri Prabhakar Sharma, Superintendent, Authorized Representative for the revenue. 3.2 Arguing for the appellant learned counsel submits that the issue Issue involved in the present case is with regards to denial of the benefit of exemption claimed by them as per notification No 26/2012-ST. dated 20.6.2012. As per the impugned order the cancellation charges retained by the appellant cannot be granted exemption under the said notification, because these charges are not towards provisions of any services as per the notification, but are in respect of services which have been defined as declared service as per Section 66 E (e). The issue involved in the matter is no longer res-integra and is covered by the following decisions: Lemon Tree Hotel [2020-TIOL-1114-CESTAT-Del] M P Poorva Kshetra Vidyut Ltd [2021 (2) TMI 821 CESTAT New Delhi) M P Audyogik Kendra Vikas Nigam Indore Ltd. [2022 TIOL 510 CESTAT DEL) South Eastern Coalfields Ltd. [2021 (55) GSTL 549 (TDel) Kingfisher Airlines Ltd. [2015 (40) STR 1159 (T-Mum)] 3.3 Arguing for the revenue....
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....pugned order along with the submissions made in appeal and during the course of arguments. 4.2 Impugned order records following findings: "7. I find from the records that the appellant in normal cases received consideration from their customers/ clients for booking rooms/ accommodation in their hotel and on occupation of the said room/ accommodation by the customers/ clients, the appellant discharges service tax on the said room charges so received under 'short-term accommodation service', after availing the abatement in terms of Notification No.26/2012-ST dated 20.6.2012. However, in cases of no show i.e. when the customers/clients do not turn up after making reservation of a room or exit early before the completion of the number of days booked, the appellant charges cancellation fees/room retention charges from the said customers/clients. The appellant discharges service tax on the said cancellation fess/retention charges under 'short term accommodation service' after availing the abatement in terms of Notification No.26/2012-ST dated 20.6.2012. It is the department's contention that the said cancellation fees/room retention charges received by the appellan....
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....M/s. Apeejay Surendra Park Hotels Ltd, Hyderabad, wherein it was held that the decision of the original authority to treat cancellation charges as 'declared services" under Section 66E(e) of the Act and to charge tax on such value without abatement available on short-term accommodation service, to be legally unsustainable. I find that the said decision of Commissioner (Appeals) is based on Guidance Note paragraph.2.3.2 of the CBEC Education Guide 2012. It has been clarified in paragraph.1.2 of the said Education Guide that the said Guidance Note does not command the required legal backing to be binding on either side in any manner. As such, reliance placed on the said decision, does not serve the cause of the appellant. I therefore find that the service provided by the appellant rightly fails under the 'Declared Service' and the *room retention charges/cancellation fees' received/charged is liable to service tax on the gross amount received/charged without abatement. The findings of the adjudicating authority to that extent need no interference. Since the demand of Service tax is sustained, the same is recoverable alongwith interest and the findings of the adjudicat....
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....ave been issued under section 93 of the Act of which the main exemption no 25/2012-ST dated 20/6/12 has 39 heads (mega notification). If the service provided by you fits into the nature and description of services specified in these notifications then the service being provided by you is an exempted service. For the sake of convenience the proposed mega exemption has been reproduced at Exhibits A3 of this Guide. 3.4.4 Are declared services also covered by exemptions? Yes." From the above it is evident that the amounts retained by the appellant from the advances received for the provision of the taxable service on cancelation of the agreement to provide the service, are to be taxed under the same category of the taxable service which was agreed to be provided, the consideration for the same would be the amount retained and the service tax shall be payable on the value determined taking the said amount as the value of the service to be provided. 4.4 I agree with the submissions made by the appellant that the issue involved in the present case is no longer res-integra. The issue is squarely covered by the decision of this Delhi Bench in the case of Lemon Tree Hotel [2020 (34)....
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....6. The Tribunal, thereafter referred to a judgment of the European Court of Justice (First Chamber) in Case C-277/2005, in Societe Thermale d'Eugenic-les-Bains v. Ministere de I'Economie, des Finances et de I'Industrie as it dealt with the issue whether an obligation to refrain from an act or to tolerate an act or situation would result in supply of services when a sum paid as a deposit by a client to a hotelier, where the client exercises the cancellation option available to him and that sum is retained by the hotelier, can be regarded as consideration for the supply of a reservation service. The Tribunal also referred to its earlier decisions in M/s. K.N. Food Industries Pvt. Ltd. v. Commissioner of CGST and Central Excise Kanpur [2019-TIOL- 3651-CESTAT-ALL = 2020 (38) G.S.T.L. 60 (Tri. - All.)] and M/s. Lemon Tree Hotel v. Commissioner, Goods and Service Tax [2020-TIOL-1114-CESTAT-DEL = 2020 (34) G.S.T.L. 220 (Tri. - Del.)]. 27. Ultimately, the Tribunal has held as follows : "43. It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the app....
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....ellant Airlines is incidental to the service being 'transport of passengers by Air' and the same is classifiable under Section 65(105)(zzn). There is no separate contract in the facts of the case for transport of goods (excess baggage). More particularly, in the case of agreement of transport of passengers by Air, there is no element of transport of unaccompanied goods. Thus, agreeing with the learned Member (Judicial), I hold that the excess baggage charges collected by the appellant Airlines is integral part of the service provided for 'transport of passengers by Air'. 4.7 CBIC has vide Circular No 178/10/2022-GST dated 3- 08.2022 clarified as follows: "4. In Service Tax law, 'Service' was defined as any activity carried out by a person for another for consideration. As discussed in service tax education guide, the concept 'activity for a consideration' involves an element of contractual relationship wherein the person doing an activity does so at the desire of the person for whom the activity is done in exchange for a consideration. An activity done without such a relationship i.e., without the express or implied contractual reciprocity of a consideration would not be an 'ac....