Custom, Excise & Service Tax Tribunal
Barshi Municipal Council vs Commissioner Of Central Excise, ... on 1 March, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. ST/230/12 & ST/85680/15-Mum [Arising out of Order-in-Appeal No. P-III/RS/07/2012 dated 23/01/2012 passed by the Commissioner of Central Excise (Appeals), Pune-III] For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
======================================================= Barshi Municipal Council :
Appellant VS Commissioner of Central Excise, Pune-III :
Respondent Appearance Shri C.S. Biradar, Advocate for the Appellant Shri S.R. Nair, E. O. (A.R.) for the Respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of hearing: 01/03/2016 Date of decision: 01/03/2016 ORDER NO. Per : M.V. Ravindran This appeal is directed against Order-in-Appeal No. PIII/RS/07/2012 dated 23/01/2012.
2. Heard both sides and perused the records.
3. The issue that falls for consideration is whether during the period 01-10-2010 to 31-03-2011, the appellant is required to discharge the service tax liability on the amounts collected as rent by providing on lease various commercial and business properties to outsiders or otherwise.
4. On consideration of the submissions made by both sides, we find that amount received by the appellant is for renting out and is covered under taxable category Renting of Immovable Property Services falling under section 65(105)(zzzz) of the Finance Act, 1994. There is no dispute that the appellant had collected rent for various commercial properties when they gave the properties on lease. In our considered view, there is no exemption granted to any municipal council on the rent received by leasing the commercial properties and accordingly, the main contention of the appellant that they are providing sovereign function while renting out property is rejected. We uphold the service tax liability and the interest thereof, the said service tax liability should be calculated on the amounts received by the appellant as cum-tax amount.
5. As regards the penalties, we find that the appellant being municipal council could not have had any intention to evade service tax liability. Accordingly, by invoking the provisions of section 80 of the Finance Act, 1994, set aside the penalties imposed.
6. The appeal stands disposed of as indicated herein above.
(Operative order pronounced in court) C.J. Mathew Member (Technical) M.V. Ravindran Member (Judicial) saifi 3 Appeal No. ST/230/12 & ST/85680/15-Mum