TaxTMI 
TaxTMI 
2026 (5) TMI 928
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....duly discharged Service tax liability thereon after availing the benefit of abatement of 40% on the value of room rent so collected in terms of Entry at S. No. 6 of Notification No. 26/2012-S.T. dated 20.6.2012 ("Abatement Notification No. 26/2012"). 3. The guests are also presented with a choice to opt for a meal plan (e.g., European Plan (EP) which includes room only, Continental Plan (CP) which includes room + breakfast, Modified American Plan (MAP) which includes room + breakfast + one major meal, and American Plan (AP) which includes room + all three meals) at clearly indicated and pre-determined rates. It is pertinent to mention that food and beverages are supplied through the Appellant's restaurant to its guests, including both resident guests as well as walk-in/ non-resident customers. 4. The consideration for supply of food and beverages is billed and recovered independently from the resident guests, and it does not form part of the declared room tariff. Accordingly, the Appellant treated such supply as independent transaction of Restaurant services by paying Service Tax thereon after availing the benefit of abatement of 60% on the value of food and beverages so coll....
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....ted 19.5.2021 ("impugned order") rejected the Appellant's appeal by upholding the OIO in entirely. 11. Aggrieved by the impugned Order, the Appellant has filed the present appeal on the following grounds which are independent of, and without prejudice to, each other. It is further humbly prayed that the present written submissions may be treated as part and parcel to the detailed submissions already made in the memorandum of appeal: SUBMISSIONS OF THE APPELLANT A. THE ACCOMMODATION SERVICES AND RESTAURANT SERVICES ARE INDEPENDENT SERVICES WHICH ARE BILLED SEPARATELY IN THE INVOICES AND THEREFORE, DO NOT CONSTITUTE 'BUNDLED SERVICE' IN TERMS OF SECTION 66F OF THE FINANCE ACT, LET ALONE 'NATURALLY BUNDLED'. CONSEQUENTLY, THE APPELLANT HAS CORRECTLY AVAILED THE BENEFIT OF ABATEMENT. A.1 It is the Department's case that the activity of providing restaurant services is naturally bundled in the ordinary course of business with providing accommodation services in terms of Section 66F(3)(a) of the Finance Act. A.2 The Appellant submits that its business model is structured in a manner where each service is offered on its own terms and for a separate consideration. Accordingl....
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....on of various services where an element of provision of one service is combined with an element or elements of provision of any other service or services. Further, in terms of Section 66F(3)(a) ibid, the taxability of a bundled service where various elements of such service are naturally bundled in the ordinary course of business shall depend on that service which gives the bundle its essential character. A.7 Reference is now made to Taxation of Services: An Education Guide dated 20.6.2012 ("Education Guide") which sets out certain indicators for determining whether two or more services are "naturally bundled" in the ordinary course of business. As per Para 9.2.4 of the Education Guide, the following factors may be considered for this purposes: (i) how is the bundle perceived by the customer; (ii) whether the majority of service providers in the relevant line of business ordinarily provide a similar bundle; (iii) the nature of the services comprised in the bundle i.e., if whether one service is the principal service and other services are merely incidental or ancillary to facilitate better enjoyment of the main service; (iv) whether a single price is charged or the customer pays....
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....ly for those services which it chooses to avail at the time of booking the room with the Appellant. As regards the availability of the individual elements separately, it is submitted that the restaurant services are, in any event, capable of being availed independently such as by walk-in/ non-resident customers or by resident guests who may dine without having booked any meal plan. On the other hand, a bundled service refers to those services which go hand-in-hand. Whereas in the present case, the services are separable at the very first instance between the parties at the time of booking the room. Therefore, it cannot be said that the supply of food & beverages will cease to exist if accommodation service is not provided. The fact that the Appellant offers the same food and prices for the food and beverages consumed by a non-resident as are offered to a resident guest, itself demonstrates that restaurant services are commercially distinct services provided by the Appellant in the ordinary course of its hospitality business. Merely because some customers, for convenience, choose both accommodation and meals do not convert two independent and separate services into a naturally bundl....
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....ber 2016 to March 2017 is time barred and liable to be set aside for being beyond the normal period of limitation. B.2 Firstly, it is submitted that the Appellant had no intention to act dishonestly and had always acted in accordance with the statutory provisions inasmuch as every relevant fact is on record and the Appellant has not engaged into any suppression, wilful misstatement, etc., with intent to evade payment of tax. All the material facts were known to the Department and the fact that the Appellant treated the accommodation service and the restaurant service separately and availed the benefit of abatement, is evident from the declaration of the said activities in its ST-3 returns filed regularly during the relevant period which were also audited by the Department. The onus on the Department to assert and prove the existence of suppression, has not been discharged in the present case. It is further submitted that there could be two or more views on a particular issue and the Appellant did the self-assessment of its tax liability as per its views and understanding. The Appellant cannot foresee what view the audit team may take in the future. Thus, it is submitted that the....
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....rder No. 51088/2024 dated 21.8.2023. • Continental Engines Ltd. v. Commissioner, Central Excise and Service Tax, Alwar (Raj.), Final Order No. 50957/2023 dated 11.7.2023. B.6. For the above reasons, as well as on account of non-sustainability of demand, bona fide belief of the Appellant that it had correctly paid the Service tax, extended period of limitation is not invokable, penalty is not imposable and interest is not recoverable. 12. In view of the above, the Appellant humbly prays that the impugned order passed by the Ld. Commissioner (Appeals) is liable to be set aside and the appeal filed by the Appellant may kindly be allowed in full, along with consequential relief, if any. 13. On the other hand learned authorised representative supported the impugned order. 14. Heard the parties. 15. we find in this case the appellant is discharging service tax and availing the benefit of abatement of 40% on the value of room rent in terms of at serial no. 6 of Notification No. 26/2012-ST dated 20.06.2012 and claiming rebate at the rate of 60% of the value of food and beverage supplied by them in terms of rule 2C of Service Tax(Determination of value of Rules) ....