Appeal partly allowed, demand confirmed within limitation period, no penalty imposed.

The appeal was partly allowed, setting aside the demand for the extended period and the penalty. The demand within the limitation period was confirmed with interest. No penalty was imposed due to the lack of malafide intention on the appellant's part.

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Issues:
Appeal against confirmed service tax demand for Renting of Immovable Property Service for the period April 2008 to March 2012; Dispute over the invocability of the extended period of limitation and imposition of penalty.

Analysis:
The appellant, the owner of a property, appealed against the confirmed demand of service tax for Renting of Immovable Property Service from April 2008 to March 2012. The appellant had been paying service tax on the property but one tenant, M/S. Vishal Retail Limited, challenged the levy of service tax. Despite a retrospective amendment in 2010, the matter was sub-judice as the Hon’ble Delhi High Court had held the levy as ultra-vires. Show cause notices were issued to the appellant invoking the extended period of limitation. The appellant disputed the invocability of the extended period and the imposition of penalty.

The appellant's counsel did not dispute the levy of service tax but contested the invocability of the extended period of limitation and the imposition of penalty. The department argued that the extended period was rightly invoked as the appellant had not paid service tax on the property let out to M/S. Vishal Retail Limited until it was discovered during an investigation by the DGCEI.

After hearing both parties, it was found that the appellant had been paying service tax for other tenants but not for M/S. Vishal Retail Limited, based on a rent deed agreement. The appellant believed in good faith that as the levy of service tax was challenged and held ultra-vires by the Hon’ble Delhi High Court, they were not required to pay. Since there was no evidence of malafide intention or suppression of facts, the benefit of doubt was given to the appellant. Consequently, the demand for the extended period was set aside, and the demand within the limitation period was confirmed with interest. No penalty was imposed due to the lack of malafide intention on the appellant's part.

In conclusion, the appeal was partly allowed, setting aside the demand for the extended period and the penalty.

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