By TIOL News Service

MUMBAI, OCT 18, 2015: THE appellants are running a hotel alongwith Banquet Hall and Conference Hall for social functions. They are registered as Mandap Keeper and paying service tax.

When Banquet Hall or Conference Hall is booked, the appellants are also providing rooms.

The department added the room rent for arriving at the gross value and demanded service tax. The lower authorities upheld the demand.

In appeal, the CESTAT observed that in the case laws reliedby appelalnt [ Merwara Estates 2009-TIOL-871-CESTAT-DEL and Rambagh Palace Hotels Pvt. Ltd. 2012-TIOL-673-CESTAT-DEL, the assessees had recovered certain amounts in respect of renting of rooms but in the present case there was no such evidence produced by the appellant. Further, as to how many rooms the service receiver had taken on rent while booking the Conference/Banquet Hall is also not on record and whether the rooms were given complimentary or the appellants were charging separately for the rooms was also not forthcoming.

The CESTAT further observed that in the earlier order passed by the Dy. Commissioner whereby 80% of the total amount had been considered towards room rent the appellant had produced a Chartered Accountant certificate but nothing of this kind was submitted in the present matter.

Holding that there is no merit in the appeals, the same were dismissed. We reported this order as 2014-TIOL-1210-CESTAT-MUM .

The appellant did not ‘retreat' but marched ahead to the High Court.

The High Court held -

++ If the Tribunal was of the opinion that such an evidence has not been produced before the adjudicating authority, but a request was made to allow production thereof, then, either the Tribunal should have allowed the production of such evidence, which is material and relevant before it or should have sent the matter back. Either way, the Tribunal has adequate powers and to render justice or to prevent miscarriage of justice.

++ We are of the view that without expressing any opinion and to subserve larger interest of justice, the opportunity to produce the evidence could have been afforded even by the Tribunal during the course of such Appeal. The Appeal has been dismissed only on a technical ground and for non production of the requisite certificate or proof of room rent being charged and bills raised in that behalf. In the circumstances, the impugned order is quashed and set aside.

The Appeal was restored to the file of the Tribunal so as to allow the Appellant to make an application and for production of further evidence, material and relevant to the above controversy.

(See 2015-TIOL-2415-HC-MUM-ST)