TaxTMI 
TaxTMI 
2025 (8) TMI 96
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....firming the demand of service tax as proposed in the show cause notice, however, remanded the matter back to the Adjudicating Authority to pass speaking order. 2. The facts of the present case are that the appellant is the owner of the property (Neemrana Fort Palace) and has given the same on rent to M/s. Neemrana Hotels Pvt. Ltd. (NHPL). That both the companies have common Directors and share holders. The appellant and NHPL had entered into an agreement dated 01.04.2012 and 01.10.2014 for levy of "entry fee" from Non-resident Guest, which was to be shared by both the parties on mutually agreed terms. The entry fee entitles the non-resident guests to access to the fort and visit marked public area for two hours and have right to stay at ....
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.... amount to consideration for the provisions of service in terms of Section 67 of the Finance Act, 1994. He further submitted that the premises have been given to NHPL, who is responsible to run, conduct, operate, manage, market and control the operation of the hotel. The gross operating profit earned by the NHPL by way of hotel business is shared between the appellant and NHPL in the specified ratio. In so far as the entry fee is concerned, he submitted that the same is charged from the Non- resident Guest against which they are entitled to access the Fort and visit marked public areas for two hours only. In addition to access the fort, the Non-resident Guest may have the right to stay at the property subject to the availability of rooms or....
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....nce Act, 1944 read with Section 66B ibid, the appellant should have paid service tax on the full value of entry fee even when the non-resident guest has opted accommodation in the hotel or for restaurant service, because they are service provider and the non-resident guest is the service receiver and the entry fee is the consideration. 7. The short question for our consideration is whether the appellant is required to pay service tax on the entire amount collected or the liability to pay service tax is limited to the share from the entry fee retained by the appellant. 8. To appreciate the issue at hand, it is necessary to peruse the terms and conditions specified in the Revenue Sharing Agreement between the appellant and NHPL. The rel....
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....dent that NHPL is paying service tax on the services enjoyed by the non-resident guest such as accommodation and restaurant services. On the other hand, the appellant is paying service tax on that part of the amount of „entry fee‟, which is being retained by them excluding the amount paid to the NHPL for the services provided by them. In cases, where the non-resident guest has neither opted for accommodation in the hotel, nor for restaurant services, the appellant is paying service tax on the entire amount of entry fee. Needless to say that the understanding for running the hotel and charging of entry fee is by virtue of the contractual agreement between the parties and the Revenue cannot add terms to the agreement contrary to t....
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....decided the issue in favour of the appellant, as discussed above, we may quote the relevant paras from the Order dated 31.01.2022 passed by the Commissioner (Appeals), whereby it has been held as under:- "8.2. From the perusal of the terms of the agreement, it is clear that both the parties agreed to levy entry fee from non-resident visitors. Sharing of entry fee and liability to pay taxes on entry fee has been clearly divided between the Appellant and M/s NHPL has also been clearly defined. It is agreed to adjust the entry fee in their respective bills for accommodation or restaurant service, in case the visitors opt for lunch or stay in hotel. In case the visitor does not opt for such services, the appellant had to retain the ent....