Appellate Tribunal overturns service tax demand for renting property citing limitation period

The Appellate Tribunal CESTAT KOLKATA set aside the confirmation of service tax demand against the appellant for renting immovable property service. The issue of invoking the extended period of limitation for the show-cause notice was deemed unsustainable due to the retrospective nature of the levy. Consequently, the Tribunal allowed the appeal in favor of the appellant, concluding that the show-cause notice was barred by limitation, and no demand was sustainable against the appellant.

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Issues involved:
The judgment involves the confirmation of service tax demand against the appellant for the period from 01.06.2007 to 31.03.2010 under the category of "renting of immovable property" service. The main issue revolves around the invocation of extended period of limitation for issuing the show-cause notice to the appellant.

Issue 1: Invocation of extended period of limitation for show-cause notice

The appellant rented out their premises to a company, and the levy of service tax on renting immovable property came into effect retrospectively from 01.06.2007. A show-cause notice was issued to the appellant on 10.10.2011 invoking the extended period of limitation. The appellant argued that the extended period of limitation is not invokable due to the retrospective nature of the levy. The Tribunal referred to a previous case where it was held that during a period of dispute and uncertainty regarding the levy of service tax, the extended period of limitation cannot be invoked. The Tribunal concluded that the show-cause notice issued to the appellant was barred by limitation, and no demand is sustainable against the appellant. Therefore, the impugned order was set aside, and the appeal was allowed with consequential relief.

Conclusion:
The judgment by the Appellate Tribunal CESTAT KOLKATA dealt with the confirmation of service tax demand against the appellant for renting immovable property service. The key issue was the invocation of extended period of limitation for issuing the show-cause notice, which was found to be not sustainable due to the retrospective nature of the levy. The Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

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