2020 (8) TMI 640 - AT - Service Tax

Tribunal rules in favor of appellant on service tax liability for rented buildings

M/s Leisure Hotels Ltd. Versus Commissioner of Central Goods and Service Tax, Customs and Central Excise Dehradun

M/s Leisure Hotels Ltd. Versus Commissioner of Central Goods and Service Tax, Customs and Central Excise Dehradun - TMI Issues:1. Liability for service tax on rented buildings under the Finance Act, 1994.2. Eligibility for abatement of 40% from 01.07.2012.3. Liability for service tax on letting out plant/machinery and fixtures.4. Invokability of extended period of limitation.5. Imposition of penalty under Section 77 and 78.Analysis:Issue 1 - Liability for service tax on rented buildings under the Finance Act, 1994:The Tribunal examined whether rented buildings fell under the definition of immovable property, making the appellant liable for service tax. The Tribunal ruled in favor of the appellant on this issue.Issue 2 - Eligibility for abatement of 40% from 01.07.2012:The Tribunal also considered whether the appellant was eligible for a 40% abatement as per Notification No. 26/2012 from 01.07.2012. This issue was decided in favor of the appellant.Issue 3 - Liability for service tax on letting out plant/machinery and fixtures:Regarding the liability for service tax on letting out plant/machinery and fixtures, the Tribunal initially made an error in its observation. It was clarified that the effective control and possession of movable goods were transferred to the lessee, absolving the appellant of service tax liability under this head.Issue 4 - Invokability of extended period of limitation:The Tribunal did not initially decide on the applicability of the extended period of limitation. However, after reviewing the facts and circumstances, it was found that the extended period of limitation was not applicable as there was no evidence of suppression, fraud, or contumacious conduct by the appellant.Issue 5 - Imposition of penalty under Section 77 and 78:No specific mention of the imposition of penalties under Section 77 and 78 was made in the judgment, indicating that this issue might not have been relevant or raised during the proceedings.The Tribunal allowed the rectification of mistake application filed by the appellant, modifying the Final Order to reflect the correct findings on the issues discussed. The judgment highlighted the importance of effective control and possession in determining service tax liability and emphasized the need for a clear understanding of the facts and circumstances before making a decision.