Tribunal rules in favor of assessee, rejecting service tax demands and clarifying taxable considerations.

The tribunal partially allowed the appeal of the assessee, setting aside the demands of service tax under various categories, including "Business Support Service" and "Tour Operator Service." The tribunal concluded that reimbursements from a state-owned company were not taxable consideration, notional interest on refundable deposits should not be included in taxable value, and the sale of space for advertisement is separately taxable. The denial of CENVAT credit was remanded for further verification, and the extended period of limitation was not applicable due to no concealment. Interest and penalties were not imposed due to no intent to evade tax.

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Issues Involved:
1. Classification of services under "Support Services of Business or Commerce."
2. Amount received from Kerala State IT Infrastructure Ltd. (KSITIL) as "Business Support Service."
3. Inclusion of notional interest on refundable deposits in the value of taxable supply.
4. Taxability of sale of space or time for advertisement.
5. Liability of bus service between Technopark and Kariyavattom under "Tour Operator Service."
6. Denial of CENVAT credit.
7. Applicability of the extended period of limitation.
8. Demand of interest and penalties.

Detailed Analysis:

Issue No. 1: Classification of Services under "Support Services of Business or Commerce"
The tribunal examined whether the services provided by the assessee fall under "Support Services of Business or Commerce" or "Renting of Immovable Property." The assessee provided built-up spaces for rent or lease, including incidental services like electricity and water supply. The tribunal found that these services are incidental to renting and amount to a sale of goods, exempt under Notification No.12/2003-ST. The tribunal referred to multiple judicial precedents, including CST(MP) Vs. Madhya Pradesh Electricity Board and ICC Realty India Pvt. Ltd. Vs. CCE, Pune-III, which held that supply of electricity amounts to the sale of goods. Therefore, the tribunal concluded that the services rendered by the assessee fall under "Renting of Immovable Property" and not "Support Services of Business or Commerce."

Issue No. 2: Amount Received from KSITIL as "Business Support Service"
The tribunal found that KSITIL is a 100% State Government-owned company, and the amounts reimbursed by KSITIL to the assessee were not for any service rendered but were merely reimbursements of expenses incurred. The tribunal held that these reimbursements could not be considered as consideration for any taxable service, thereby setting aside the demand of Rs. 19,08,987/-.

Issue No. 3: Inclusion of Notional Interest on Refundable Deposits
The tribunal held that notional interest on refundable deposits could not be included in the value of taxable service. It found no nexus between the security deposit and the lease rental. The tribunal referred to judicial precedents like Murali Realtors Pvt. Ltd. Vs. CCE, Pune and Karnataka Industrial Areas Development Board Vs. CCT, Bangalore, which held that notional interest on security deposits should not be considered for inclusion in actual rent.

Issue No. 4: Taxability of Sale of Space or Time for Advertisement
The tribunal held that the sale of space or time for advertisement is independently classifiable under Section 65(105)(zzzm) of the Finance Act, 1994, and not under "Business Support Service." Therefore, the demand of service tax under the wrong classification was not sustainable.

Issue No. 5: Liability of Bus Service under "Tour Operator Service"
The tribunal found that the bus service was provided by M/s. Cosmos Travels, which had the necessary permits and collected and remitted the service tax. Therefore, the assessee was not liable to pay service tax under "Tour Operator Service."

Issue No. 6: Denial of CENVAT Credit
The tribunal noted that the Commissioner had denied credit on various grounds, including defects in invoices. The tribunal remanded the matter back to the original authority for verification of documents and declarations to determine the entitlement of CENVAT credit.

Issue No. 7: Applicability of Extended Period of Limitation
The tribunal found that the assessee had not concealed any information from the Department and had been paying service tax on "Renting of Immovable Property" since its imposition. The tribunal referred to various correspondences between the assessee and the Department and concluded that the extended period of limitation could not be invoked.

Issue No. 8: Demand of Interest and Penalties
The tribunal held that since the demand itself was not sustainable, the question of interest and penalties did not arise. It also noted that there was no intention to evade service tax, and therefore, penalties were not imposable.

Conclusion:
The tribunal partially allowed the appeal of the assessee, setting aside the demands of service tax under various categories and remanding the matter for verification of CENVAT credit. The Department's appeal was dismissed.

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