Custom, Excise & Service Tax Tribunal
Maa Communications Ltd vs Principal Commissioner Of Service Tax, ... on 10 January, 2018
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/20282/2017-SM [Arising out of Order-in-Appeal No. 1669/2016 dated 28/11/2016 passed by the Commissioner of Service Tax, Bangalore-I (Appeals)] MAA Communications Ltd. No. 6, Service Road, Domlur Layout Bangalore 560 071 Karnataka Appellant(s) Versus Principal Commissioner of Service Tax, Bangalore Service Tax-II 4th Floor, T.T.M.C.-B.M.T.C. Bus Stand Building, Old Airport Road Bangalore 560 071 Karnataka Respondent(s)
Appearance:
Shri N. Anand, Advocate # 152, Race Course Road, Bangalore 560 001 Karnataka For the Appellant Shri Pakshirajan, Assistant Commissioner (AR) For the Respondent Date of Hearing: 10/01/2018 Date of Decision: 10/01/2018 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20033 / 2018 Per : S.S GARG The present appeal is directed against the impugned order dated 28.11.2016 filed by the assessee whereby the learned Commissioner (Appeals) has remanded the matter to the original authority. Further the Commissioner (Appeals) has confirmed the demand of service tax on Renting of Immovable Property by invoking the extended period of limitation against which the assessee has filed the present appeal.
2. Briefly the facts of the present case are that based on audit conducted by the Department it was observed that the appellant has availed input service credit to the tune of Rs. 22,48,620/- (Rupees Twenty Two Lakhs Forty Eight Thousand Six Hundred and Twenty only) on Club Services, Tours and Travel Services, Sodexho Passes, Rent-a-Cab Service and Credit Card Services which were held to be ineligible as these services do not meet the criteria of input services as defined under Rule 2(l) of Cenvat Credit Rules, 2004. Further, it was observed that the appellant had availed input service credit to the tune of Rs. 23,83,988/- (Rupees Twenty Three Lakhs Eighty Three Thousand Nine Hundred and Eighty Eight only) against invoices which were issued to M/s. Turn on, which the Department alleges is irregular. In addition to the above, the Department has demanded service tax under the category of Renting of Immovable Property Services rendered by the appellant and the demand has been confirmed to the extent of Rs. 3,31,084/- (Rupees Three Lakhs Thirty One Thousand and Eighty Four only). There is another issue of short payment of service tax to the tune of Rs. 13,174/- (Rupees Thirteen Thousand One Hundred and Seventy Four only) for the period August 2010, February 2011 and March 2011, which has also been confirmed. Interest has also been demanded and penalties imposed on the appellant under Sections 77 and 78 of the Finance Act, 1994. Aggrieved by the original order, the assessee filed appeal before the Commissioner (Appeals) who allowed the appeal by way of remand. Hence the present appeal.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering the binding judicial precedent of the Tribunal and the High Court on the same issue. He further submitted that in the present appeal the appellant is questioning the confirmation of demand of service tax on rent. He further submitted that the appellant is not disputing the tax on Renting of Immovable Property but only questioning the amount demanded. He further submitted that substantial part of the demands for the year 2007-08 to 2009-10 is barred by limitation. He further submitted that the show-cause notice proposing to demand service tax for the period from 2007-08 to 2009-10 is barred by limitation inasmuch as the extended period of limitation cannot be pressed into services in view of the facts and circumstances enumerated herein under:
a) Renting per se was not a taxable service under Section 65(105)(zzzz) of the Act during the period from June 2007 to 8.5.2010. Strictly there was no liability to pay service tax on Renting of Property by the appellant during the said period and the question of obtaining registration, filing returns, payment of service tax, etc., was not required in law.
b) The Department had not issued any show-cause notice during the above period.
c) Finance Act, 2010 made retrospective effect construing renting per se as taxable service under Section 65(105)(zzzz).
d) Section 77 of the Finance Act, 2010 is a validation provision which validated the action if any taken by the Department during the period from 01.06.2007 to 08.05.2010. This validation provision only saved and/or validated the Departments action if any taken under Section 65(105)(zzzz).
e) In the appellants case no action whatsoever was initiated by the Department during the period 01.06.2007 to 08.05.2010. Hence, the validating provision Section 77 of the Finance Act, 2010 is inapplicable to the appellant.
f) Even after passing of the Finance Act, 2010 i.e on 08.05.2010 the Department did not chose to issue any show-cause notice and the show-cause notice came to be issued only on 18.10.12. Hence, the question of invoking the extended period of limitation does not arise both on facts and in law.
4.1. He further submitted that though the Parliament has made retrospective amendment to the statutory provision but the Department cannot issue show-cause notice including the extended period of limitation under provisions to Section 73(1) since there cannot be any question of any willful suppression of fact etc. in such a case. In support of this submission, he relied upon the following decisions:
a) Morarji Goculdas B&W Co. Ltd. Vs. Union of India 1996 (83) E.L.T. 259 (S.C)
b) J.K. Spinning & Weaving Mills Ltd. V. Union of India 1987 (32) E.L.T. 234 (SC) 4.2. He further submitted that there is always been a confusion on the service tax levy on Renting of Immovable Property and there have been various amendments and the issue is still not resolved. He further submitted that this issue has been considered by the Tribunal in various cases and he particularly relied upon the following decisions which has categorically held that there was a doubt regarding the levy of tax on Renting of Immovable Property and it was set right by retrospective amendment of Finance Act 2010 neutralizing Delhi High Court judgment in Home Solution Retail India Ltd. and therefore assessee cannot be accused of suppression of material facts and therefore, extended period cannot be invoked. The decisions are as under:
a) Jindal Vegetable Products Ltd. V. CCE 2013 (31) STR 367 (Tri.-Del.)
b) Sujala Pipes Pvt. Ltd. Vs. CCE 2015 (40) STR 606 (Tri.-Bang.)
c) National Institute of Bank Management Vs. CCE 2013 (32) STR 340 (Tri.-Mum.)
d) CCE Vs. Trimurti Build Tech Pvt. Ltd. 2017 (3) GSTL 489 (Tri.-All.)
5. In view of the ratios of the various decisions, I hold that assessee is liable to pay the rent on immovable property for the normal period along with interest and invoking of the extended period is set aside and the appeal is partly allowed.
(Operative portion of the Order was pronounced in Open Court on 10/01/2018) (S.S GARG) JUDICIAL MEMBER iss...