Tribunal rules in favor of appellant, setting aside Service Tax demand on consideration sharing.

The Tribunal ruled in favor of the appellant, setting aside the demand for Service Tax on the sharing of consideration, citing the principle of revenue neutrality and the absence of mala fide intent. The limitations on the demand were upheld, and penalties were deemed inapplicable due to the circumstances of the case.

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Issues:
- Whether Service Tax is payable on the sharing of consideration towards service provided by the appellantRs.
- Whether the demand for Service Tax is hit by limitationRs.
- Whether penalty is imposable on the appellant for non-payment of Service Tax and renting incomeRs.

Analysis:

Issue 1: Service Tax on sharing of consideration
The appellant, a registered trust providing property on rent for charitable activities, was involved in a dispute regarding the Service Tax liability on the sharing of receipts from a contractor providing services on the appellant's premises. The Tribunal noted that the appellant did not directly provide any service but shared in the contractor's receipt for Mandap keeper services. It was held that mere sharing of consideration does not amount to the provision of a service by the appellant. The Tribunal found that the appellant had a bona fide belief in not paying Service Tax and that the case fell under the principle of revenue neutrality, as any tax paid by the appellant was available as Cenvat credit to the contractor. Consequently, the demand for Service Tax was set aside on the grounds of limitation, as the extended period could not be invoked in this scenario.

Issue 2: Limitation of the demand
The Tribunal determined that the demand for Service Tax was hit by limitation due to the appellant's genuine belief in not being liable to pay the tax. It was established that there was no suppression of facts or mala fide intent on the appellant's part, as the tax payment, if any, was available to the contractor as Cenvat credit. Therefore, the demand was considered time-barred, and the impugned order was modified accordingly.

Issue 3: Imposition of penalty
Regarding the imposition of penalties on the appellant for non-payment of Service Tax and renting income, the Tribunal found in favor of the appellant. It was observed that there was no mala fide intent on the appellant's part, and the case was deemed to be revenue neutral due to the availability of Cenvat credit to the contractor. Consequently, the Tribunal held that penalties were not imposable, and the appeal was allowed in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the demand for Service Tax on the sharing of consideration, citing the principle of revenue neutrality and the absence of mala fide intent. The limitations on the demand were upheld, and penalties were deemed inapplicable due to the circumstances of the case.

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