Custom, Excise & Service Tax Tribunal
Ms Anuradha Sharma vs Lucknow on 11 July, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
REGIONAL BENCH : ALLAHABAD
COURT No. I
APPEAL No. ST/70384/2018-ST[SM]
(Arising out of Order-in-Appeal No. 375-ST/APPL/LKO/2017 dated
11/12/2017 passed by Commissioner Customs GST & Central Excise
(Appeals), Lucknow)
Ms Anuradha Sharma Appellant
Vs.
Commissioner (Appeals), Customs GST and Central Excise, Lucknow
Respondent
Appearance:
Shri Shambhu Chopra (Proxy Counsel) for Appellant Shri Gyanendra Kumar Tripathi (AC) AR for Respondent CORAM:
Hon'ble Smt. Archana Wadhwa, Member (Judicial) Date of Hearing : 11/07/2018 Date of Decision : 11/07/2018 FINAL ORDER NO. 71542 / 2018 Per: Archana Wadhwa After rejecting the request for adjournment, I proceed to decide the appeal itself, inasmuch as the notice of hearing was given well in advance to the appellant and there is no force in the prayer of the learned Advocate that he has not gone through full papers as he got them only yesterday. If a notice of hearing has been sent to the assessee well in advance, it was the responsibility of the assessee to make full arrangements for engaging the advocate in advance and to hand over papers to 2 APPEAL No. ST/70384/2018-ST[SM] the advocate. Further I also note that the appeal has been filed by the appellant's Authorized Representative under a Vakalatnama by the name of Mr. Brijesh Verma and Associates, whereas the request for adjournment is being made by Advocate Shri Shambhu Chopra whose Vakalatnama is not on record. He only submits that he will submit his Vakalatnama today. As his Vakalatnama as also "No Objection Certificate" from the previous counsel is not on record the request made by the learned advocate cannot be entertained as he is not authorized to appear.
2. On going through the impugned orders I find that the demand of Service Tax stand confirmed against the appellant under the category of "Renting of Immovable Property". As per the investigations made by the Revenue, it was found that the appellant, who is an owner of properties at Mumbai as also at Agra had rented the same to the tenants under agreement and was receiving the rent on monthly basis from them. The appellant was neither registered with the Service Tax Department nor was discharging its obligation under the "Renting of Immovable Property", by paying the appropriate service tax.
3. On the above basis proceedings were initiated against them by way of issuance of a show cause notice dated 03.09.2012 raising demand of duty of service tax to the extent of Rs.4,27,030.00/- and also proposing imposition of penalty. It is also seen that as the appellant had already paid service tax 3 APPEAL No. ST/70384/2018-ST[SM] amounting to Rs.1,62,454/- along with interest of Rs.29,325/- the proposal was to confirm the balance service tax.
4. During the course of adjudication the appellant contested the quantum of the service tax on the ground that they are entitled to the initial threshold exemption for the years 2009-10 and 2010-11 as also on the ground that the premises were lying vacant for the period July, 2011 to December, 2011.
5. While adjudicating, the Deputy Commissioner, Service Tax, Agra accepted the assessee's stand of entitlement to the threshold exemption. As regards the premises lying vacant during the period July, 2011 to December, 2011, he observed that even if it is assumed that the premises were occupied during the entire period in terms of the agreement but Form 26 AS submitted by the party shows that the party received the amount made by their tenant only upto June, 2011 and thereafter, the premises were rented to another company from February, 2012. He, accordingly accepted assessee's stands that the premises were lying vacant during the said period and no rent was received by them.
By observing so, he held that inasmuch as during the period, apart from the one during which the premises were lying vacant, the appellant have received the rent from the tenants and provided services, the same are liable to service tax. For arriving at the value he adopted the same as shown in Form 26 AS, by not accepting the assessee's evidence of Bank Account. 4 APPEAL No. ST/70384/2018-ST[SM] He observed that there can be more that one bank account and Form 26 AS is the correct document to be relied upon for the purpose of arriving at the value of the services.
The said order of the Original Adjudicating Authority stands upheld by the Commissioner (Appeals) and hence the present appeal.
6. The have raised only two grounds before the Original Adjudicating Authority i.e., one relatable to the threshold exemption and the other relatable to the premises lying vacant during a particular period. Both said issues stand accepted by the Adjudicating Authority. It is not the appellant's case that they have not provided services during the period in question and the only dispute is to the value of the same. Whereas appellant have contended that the receipts reflected in their bank accounts should be considered as the value of the services, the Revenue has gone by the terms of the agreement entered into between the appellant and their tenants as also by the value reflected in Form 26 AS.
After hearing the learned AR I note that Form 26 AS is a document under the Income Tax Law reflecting the amount of tax deduction at source (TDS). Admittedly the TDS is required to be deducted by a person making payment to another person and reflects on all the payment actually made. The appellants have not produced any evidence to show that such TDS amount reflected in Form 26 AS is incorrect or inflated or the appellant 5 APPEAL No. ST/70384/2018-ST[SM] have made any refund claim of such excess TDS collected by the tenant, from the Income Tax Authorities. In such a scenario, I hold that the amounts reflected in Form 26 AS represent the correct value of the services which has to be adopted as the assessable value, unless evidence to the contrary is produced by the appellant.
7. In view of the above I find no infirmity in the impugned orders confirming the differential duty of Rs.2,33,186/-. However, as regards penalty which stands imposed under the provisions of Section 78 of the Finance Act and of Rs.10,000/- under Section 78 of the Finance Act, I find that the during the relevant period, the taxability under the category of "Renting of Immovable Property" was under dispute and subject matter of litigation before various Courts. In such a scenario, non- payment of tax by the appellant cannot be held on account of any mala fide, thus requiring any invocation of Penal provisions against the appellant. Accordingly, I find no justification for imposition of penalty. The same is set aside.
8. Appeal is disposed of in above terms.
(Dictated and pronounced in Court) Sd/-
(Archana Wadhwa) Member (Judicial) Ankit