APMC not liable for service tax post-30-6-2012

The Agriculture Produce Market Committee (APMC) was held liable to pay service tax on renting immovable property up to 30-6-2012 but not thereafter for storage of agricultural produce. The demand for the extended period was set aside due to no evidence of malafide intent. The APMC was granted the benefit of cum-tax value, and the revenue was directed to re-quantify the demand for the normal period accordingly. The appeal was allowed in favor of the APMC on these grounds.

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Issues Involved:
1. Liability of APMC to pay service tax on renting of immovable property.
2. Applicability of extended period for demand.
3. Eligibility for cum-tax value benefit.

Summary:

1. Liability of APMC to Pay Service Tax on Renting of Immovable Property:
The primary issue was whether the appellant, Agriculture Produce Market Committee (APMC), is liable to pay service tax on the rent recovered from renting shops, godowns, offices, etc., to commission agents/traders under the head of Renting of Immovable Property Service. The Tribunal referred to the case of Krishi Upaj Mandi Samiti - 2017 (4) GSTL 346 (Tri. Del.), upheld by the Supreme Court, which decided against the appellant on merits. It was held that the appellant is liable to pay service tax under the category of "renting of immovable property service" for the period up to 30-6-2012. However, from 1-7-2012, under the Negative List Regime, the appellant is not liable to pay service tax for sheds/shops/premises leased out for storage of agricultural produce in the marketing area.

2. Applicability of Extended Period for Demand:
The appellant argued that the demand is hit by limitation and should be set aside for the extended period due to no malafide intent to evade service tax. The Tribunal agreed with this contention, citing the same findings in the Krishi Upaj Mandi Samiti case, where it was held that the extended period demand is not sustainable as there was no evidence of malafide intent by the appellant. Consequently, the demand for the extended period was set aside.

3. Eligibility for Cum-Tax Value Benefit:
The appellant requested the benefit of cum-tax value, which the Tribunal acknowledged. It was directed that the demand for the normal period be re-quantified by giving the benefit of cum-tax value principle. The revenue was given liberty to work out the demand for the normal period by extending the cum-tax benefit and recover/adjust from the deposits made by the appellant, if any.

Conclusion:
The Tribunal concluded that the appellant is liable to pay service tax for the period up to 30-6-2012 but not for the period from 1-7-2012 onwards for storage of agricultural produce. The demand for the extended period was set aside, and the appellant was granted the benefit of cum-tax value. The appeal was allowed in these terms.

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