' B.G.N. KAZI, J.---The petitioners who are owners of the Hotel Intercontinental, Karachi, have filed the instant petition challenging the authority of the Superintendent, Central Excise and Land Customs, Circle A, Karachi, who served notice of demand on them for payment of Central Excise Duty on services rendered during the period from July, 1970 to January, 1972, amounting to Rs,96,671.15.
2. The facts giving rise to the filing of this petition arc that the petitioners who are owners of the Hotel Intercontinental, Karachi, have given space in the lobby of the Hotel on licence fee which according to them includes compensation for occupation, central air-conditioning, telephone charges. The demand is objected to as illegal and void on the ground that it is calculated on the total amount of such licence fee. It is the case of the petitioner that they do not render to the licencees any services, facilities including catering, supplies and marchandise falling under item No, 1 of Part II of the First Schedule of the Central Excises and Salt Act, 1944. It is further contended that all charges of catering, supplies and merchandise paid by the shopkeepers are included in the service charges and the Central Excises Tax has already been paid on such items falling under the head of Part II of the First Schedule of the said Act.
' Clause (dd) of section 2 of the Central Excises and Salt Act, 1944, was added by Finance Ordinance, 1970 (Ordinance No,XI of 1970) and reads as under: "excisable services" means services, facilities and utilities specified in Part II of the First Schedule as being subject to a duty of excise."
Part II of the First Schedule under the head services rendered by Hotels and Restaurants, provides as under:- "1. Services rendered by Hotels and Restaurants.---(1) All services, facilities and utilities, including catering, supplies and merchandise provided or rendered by an hotel.
' Explanation.---"Hotel" means an establishment, organization or place where rooms or suites of rooms are let out on rent, whether or not it has any arrangement for catering or a restaurant or provides any other services, facilities or utilities, by whatever name called."
' The contentions of the petitioners are based on the assertion that service charges are payable only in respect of their business as 'Hotel'. The perusal of the explanation under item 1, Part II of the First Schedule of the Act would show that `hotel' not only means an establishment, organization or place where rooms or suites of rooms are let on rent but includes any such establishment, organization or place whether or not it has any arrangement for catering or restaurant or provides any other services, facilities or utilities by whatever name called. The providing of shopping arcade inside the premises of the hotel is covered by the terms services, facilities and utilities to the customers and therefore, there is liability to payment of Central Excise Duty. The very fact that the petitioners are receiving rent in the shape of licence fee at the rate charged would indicate that they were doing so with a view to attract more customers as is usual for high class Hotels to provide facilities including a shopping centre for convenience of the customers. No fault can, therefore, be found with the Excise Authorities levying and collecting duty on the services provided which are excisable.
3. The action of respondent No,1, in serving notice of demand on the petitioners has been taken with lawful authority and is legal and valid. If the petitioners have any grievance with regard to the amount of duty levied, the Central Excises and Salt Act, 1944, makes provision of appeal and revision under sections 35 and 36 thereof. In the circumstances stated the writ petition is dismissed with costs.