Tribunal rules on Service Tax liability for parking fees and Cenvat Credit eligibility

The Tribunal held the appellant liable for Service Tax on parking fees collected from shop owners/employees but not from individual visitors. The Cenvat Credit claimed on banking and financial services for constructing the mall was deemed eligible. Penalties for non-payment of tax on certain parking fees were waived due to reasonable cause.

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Issues:
1. Liability of the appellant to pay Service Tax under Renting to Immovable Property Service for parking fees collected.
2. Eligibility of Cenvat Credit on banking and financial services for the construction of the mall.

Analysis:
Issue 1:
The dispute revolved around the appellant's liability to pay Service Tax under Renting to Immovable Property Service for parking fees collected from various individuals using the appellant's premise for parking. The lower Authority held the appellant liable for Service Tax on all parking fees, considering them under the taxable entry of renting immovable property service. The appellant's consultant argued that parking fees from mall visitors do not promote business or commerce and thus should not attract Service Tax. However, monthly parking charges from shop owners/employees renting space in the mall were not contested. The Tribunal noted that fees from individual visitors do not fall under the renting of immovable property service category as it requires the property to be used in the furtherance of business or commerce. On the other hand, fees collected from shop owners/employees for parking, along with rent, were deemed to be in furtherance of business or commerce, making them taxable.

Issue 2:
Regarding the eligibility of Cenvat Credit on banking and other financial services for constructing the mall, the Tribunal agreed with the appellant that such finance arrangements were attributable to the creation of the mall, which is used for providing taxable output services. The finance obtained was considered an input service related to the appellant's business activities. The Tribunal supported this stance by referencing various decisions, highlighting the connection between the finance raised and the taxable output services provided by the appellant. The Tribunal also considered the appellant's plea against penalties, acknowledging the complexity and litigation surrounding the tax entry for renting immovable property services. Given the circumstances and amendments in the tax entry, the Tribunal waived penalties imposed on the appellant, citing reasonable cause for non-payment of tax on a portion of parking fees.

In conclusion, the Tribunal upheld the Service Tax liability on parking facility provided to shop owners/employees but ruled out the liability on parking fees from visitors. The Cenvat Credit claimed by the appellant on banking and financial services was deemed eligible, and penalties were waived due to reasonable cause for non-payment of tax on certain parking fees.

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