Tribunal allows appeal on Service Tax demand for leasing licenses in alcoholic beverages sector.

The Tribunal ruled in favor of the appellant, a company in the alcoholic beverages manufacturing sector, in a case involving the demand of Service Tax on leasing licenses and bottling services. The Tribunal held that leasing licenses is distinct from renting immovable property, thus allowing the appeal. Additionally, the Tribunal upheld the appellant's argument that licenses are not immovable property, emphasizing that licenses can be transferred to different premises. The Tribunal also allowed the appellant's appeal on the denial of Cenvat Credit on photocopies of invoices due to the lack of adequate findings by the Commissioner.

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Issues: Whether the amount recovered for leasing the potable liquor licences was exigible to service tax as renting of immovable property service.

Analysis: The licence in question was issued under the Maharashtra Distillation of Spirit and Manufacture of Potable Liquor Rules, 1966, which show that the licence is granted to a person in respect of a manufactory and is capable of transfer in specified circumstances. The regulatory scheme also permits grant of licence even before the manufactory comes into existence, and the agreement reflected that what was commercially dealt with was the licence to carry on the manufacturing activity, not a lease of the factory premises as immovable property. On that basis, the licence fee could not be characterised as consideration for renting immovable property within the charging provision relied upon by the Revenue.

Conclusion: The levy of service tax on the licence fee under renting of immovable property service was not sustainable and the appeal succeeded in favour of the assessee.

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