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of <h1>Tribunal upholds service tax demand on maintenance charges but cancels penalties for State Govt IT Corp.</h1> <h3>M/s. Tidel Park Ltd. Versus Commissioner of GST And Central Excise, Chennai South Commissionerate</h3> The Tribunal upheld the demand for service tax on maintenance charges collected by the appellant from clients but set aside the penalties imposed. The ... Renting of immovable property service - Whether appellant is liable to pay service tax under the category of ‘maintenance of repair service’? - penalty - Held that: - the department had issued an earlier show cause notice on the very same set of facts and allegations. Therefore, they cannot allege suppression of facts with intent to evade payment of service tax - the adjudicating authority is directed to recalculate the demand giving the benefit of CENVAT credit if any. The contention of the ld. AR that the appellant had not furnished details as required by the department does not hold water for the reason that the letter requesting for details has been issued by the department only on 13.12.2007 which is much after the normal period. Taking these facts into consideration, we are of the view that the penalty imposed is unwarranted and requires to be set aside. Appeal allowed in part. Issues: Liability to pay service tax on maintenance charges collected from clients, imposition of penalties for non-payment of service tax, suppression of facts by the appellant.Liability to Pay Service Tax: The appellants developed a commercial space rented out to IT companies and did not pay service tax on maintenance charges. The original authority confirmed the demand for service tax, interest, and imposed penalties under the Finance Act. The appellant argued that they believed they were not liable for service tax due to ongoing disputes regarding the levy of service tax on renting immovable property. The Tribunal considered the previous decision in the appellant's case and ruled that the penalties were unwarranted, given the appellant's status as a State Government Corporation promoting IT services.Imposition of Penalties: The appellant's consultant argued that penalties should be set aside as the appellant was still litigating the issue, indicating no intent to evade payment. The department claimed the appellant suppressed facts by not providing details promptly. The Tribunal found that since the department issued the letter requesting details after the normal period, the penalties imposed were unjustified. Therefore, the penalties were set aside based on the facts presented.Suppression of Facts: The department alleged that the appellant suppressed facts by not furnishing details promptly, leading to the imposition of penalties. However, the Tribunal noted that the department's request for details was issued much later than the normal period, indicating that the appellant did not intentionally evade payment. The Tribunal concluded that the penalties imposed on the appellant were unwarranted and set them aside, following the decision in the appellant's previous case.The Tribunal upheld the demand for service tax and directed the adjudicating authority to recalculate the demand considering any CENVAT credit. The penalties imposed on the appellant were set aside. The impugned order was modified, and the appeal was disposed of accordingly.
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