M/s. Hotel Lake View Ashok Versus CGST, CE & CC, Bhopal
Service Tax
2018 (9) TMI 500 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 13-8-2018
Service Tax Appeal No. 50156 of 2015 – ST/A/52885/2018-CU[DB]
Service Tax
Mr. C L Mahar, Member (Technical) And Ms. Rachna Gupta, Member (Judicial)
Shri Sandeep Mukherjee, CA for the Appellants
Shri Sanjay Jain, AR for the Respondent
ORDER
Per: C L Mahar:
The brief facts of the matter are that appellant has entered into a joint venture with Madhya Pradesh State Tourist Corporation and started a rail coach restaurant in the name of “Shan-e- Bhopal”. As per the terms and conditions of the agreement, the appellant is receiving 20% of sale proceeds in the form of commission for providing space and other infrastructural support such as electricity water manpower and security etc. to the 'Shan-e-Bhopal'. During the audit by the department, it was detected that the appellant had received certain amounts towards elect
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) who has vide his order dated 22.7.2014 has further confirmed the charges raised in the above mentioned order of Asstt. Commissioner. It has been contended by the learned advocate appearing on behalf of appellant that:
(i) that the service tax amount chargeable on 20% commission charged by the appellant from the sale proceeds of 'Shan-e-Punjab restaurant' the service tax under Business Support service has already been deposited by them from time to time. Wherever, there have been any delay, interest is also being paid by the appellant;
(ii) that the charges collected by them towards electricity and water charges, same were on the actual basis and after collecting the electricity and water charges, same have been deposited by them with the respective authorities providing the services of water and electricity supply. It has further been added that so far as the demanding of service tax on water and electricity charges are concerned, the same is not within the provisions of service ta
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xtended time provision of 5 years cannot be invoked in their case.
3. Learned advocate appearing on behalf of the appellant have also placed reliance on certain decisions of this Tribunal wherein it has been provided that the charges recovered by the service provider as an pure agent should not form the part of the taxable value of the services.
(i) Shakeel Afjal Ladak vs. CCE, Mumbai I
[2014 (34) STR 144 (Tri-Mum)];
(ii) Mandhana Exports vs. CCE, Kolhapur
[2017 (49) STR 554 (Tri-Mum)]; and
(iii) Mohan Enterprises vs. CCE, Visakhapatnam
[2011 (21) STR 619 (Tri-Bang)]
4. We have also heard the learned DR and he has reiterated the findings of the impugned order in appeal of the Commissioner (Appeals).
5. We have heard both the sides and have also perused the record of the appeal. It is a matter of record that appellants have been charging 20% of sales proceeds from „Shan-e-Bhopal Restaurant‟ as a commission for providing support service to business in the form of pro
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s are being provided by other Government agencies and the charges for use of the said facilities is being raised on the service provider i.e. the appellant on actual basis which the appellant is collecting from the Shan-e-Bhopal Restaurant' and same is deposited with the authorities providing electricity and water. In view of these facts, it can be concluded that the appellant is purely working as an agent in collecting the charges with regard to supply of water and electricity and deposited the same with authorities concerned. The provisions of Rule 5(2) of Service Tax (Determination of Value) Rules provides that wherever the expenditure cost incurred or received by the service provider as a pure agent, same shall be excluded from the taxable value of the service. As all the conditions provided in Rule 5(2) of Service Tax Valuation Rules, 2006 are satisfied, we are of the opinion that appellant has behaved purely as and agent and the charges of electricity and water cannot be incl
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