2018 (2) TMI 327 - AT - Service Tax

Tribunal rules on service tax demand for Renting of Immovable Property, extends limitation period

The Tribunal partially confirmed the demand of service tax on Renting of Immovable Property, holding the appellant liable for the normal period but ... Renting of Immovable Property Service - service tax short paid - extended period of limitation - 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 - assessee cannot be accused of suppression of material facts and therefore, extended period cannot be invoked. Reliance placed in the case of Commissioner of Central Excise & Service Tax, Allahabad. Versus M/s. Trimurti Build Tech Private Ltd. [2016 (6) TMI 1175 - CESTAT ALLAHABAD], where it was held that No case of any contumacious conduct and/or suppression on the part of the respondent is made out. It is further held that the appellant have rightly paid Service Tax on receipt basis. The 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 - appeal allowed in part. Issues:1. Confirmation of demand of service tax on Renting of Immovable Property.2. Eligibility of input service credit availed by the appellant.3. Short payment of service tax for specific periods.4. Application of extended period of limitation.5. Validity of show-cause notice issued by the Department.6. Interpretation of retrospective amendment to the statutory provision.7. Invocation of extended period of limitation for willful suppression of facts.8. Confusion regarding service tax levy on Renting of Immovable Property.9. Applicability of judicial precedents on the issue.Confirmation of demand of service tax on Renting of Immovable Property:The appeal was filed against the order confirming the demand of service tax on Renting of Immovable Property. The appellant questioned the amount demanded, stating that the tax on Renting of Immovable Property was not disputed, but only the quantum. The demand was partially confirmed, and the appellant argued that a substantial part of the demands for certain years was barred by limitation. The appellant contended that renting was not a taxable service during a specific period and that the show-cause notice proposing the demand was time-barred.Eligibility of input service credit:The appellant had availed input service credit on various services, which the Department deemed ineligible. The Department observed irregularities in the invoices issued to a specific entity. The appellant challenged the denial of input service credit and the irregularities alleged by the Department.Short payment of service tax:There was an issue of short payment of service tax for specific periods, and the same was confirmed by the Department. The appellant disputed the short payment and argued against the penalties imposed.Application of extended period of limitation:The appellant contended that the extended period of limitation could not be invoked due to the retrospective amendment to the statutory provision. The appellant argued that the show-cause notice issued beyond the normal period was not valid.Validity of show-cause notice issued by the Department:The appellant argued that the show-cause notice issued by the Department was invalid due to the retrospective nature of the amendment and the absence of willful suppression of facts.Interpretation of retrospective amendment to the statutory provision:The appellant relied on judicial precedents to support the argument that the retrospective amendment did not warrant the invocation of the extended period of limitation, especially in the absence of willful suppression of facts.Confusion regarding service tax levy on Renting of Immovable Property:The appellant highlighted the confusion surrounding the levy of service tax on Renting of Immovable Property, citing various amendments and unresolved issues. Judicial decisions were presented to support the contention that the appellant could not be accused of suppression of material facts, thereby challenging the invocation of the extended period.Applicability of judicial precedents on the issue:The Tribunal considered various judicial decisions that addressed the confusion regarding the levy of tax on Renting of Immovable Property. Relying on these precedents, the Tribunal held the appellant liable to pay the rent on immovable property for the normal period, set aside the invoking of the extended period, and partly allowed the appeal.