2024 (10) TMI 146 - AT - Service Tax

Car parking fees excluded from service tax, electricity reimbursements not taxable, signage charges time-barred, CENVAT credit reversal unsustainable

M/s. Forum Mall Management Services Pvt. Ltd. Versus Commissioner of Service Tax, Kolkata And Commissioner of Service Tax, Kolkata Versus M/s. Forum Mall Management Services Pvt. Ltd.

CESTAT Kolkata allowed the appellant's appeal against service tax demands totaling Rs.9,79,096. The tribunal held that car parking fees are excluded from ... Non-payment of service tax - car parking fee under the category renting of immovable property service - reimbursement of electricity charges under the category of management, maintenance and repair service - management, maintenance and repair service on signage charges - inadmissible CENVAT Credit - interest - penalty. Demand of Service Tax of Rs.8,99,864/- on car parking fee under the category of ‘renting of immovable property service’ - HELD THAT:- The issue is no longer res integra as the Hon’ble Delhi High Court has decided this issue in the case of MAHESH SUNNY ENTERPRISES PVT. LTD. VERSUS COMMISSIONER, SERVICE TAX COMMISSIONERATE [2014 (2) TMI 1001 - DELHI HIGH COURT] where it was held that 'Now, parking services - regardless of wherever it is carried on - stand excluded in entirety. Therefore, it is not open now for the revenue to argue that it falls within the expression “airport service” under Section 65(105)(zzm). Parliament would have manifested its intention to bring to tax a part of the activity, carried out in airport premises, if it wished, in more express and clearer terms.' In terms of the decision of the Hon’ble Apex Court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT], when a Show Cause Notice has already been issued on the same issue, another Show Cause Notice cannot be issued by invoking the extended period of limitation. In view of the above, this demand is not sustainable on the ground of limitation also. Demand of Service Tax amounting to Rs.42,03,908/- on ‘reimbursement of electricity charges’ under the category of ‘management, maintenance and repair service’ - HELD THAT:- The assessee-appellant has collected electricity charges on actual consumption basis and paid the same to CESC Limited. Hence, there is no liability on the assessee-appellant to pay Service Tax on this amount of reimbursement collected from the shop owners, as they acted as a 'Pure agent'. This issue is no longer res integra as this Bench has already examined this issue in the case of M/S CHOICEST ENTERPRISES LIMITED VERSUS COMMISSIONER OF SERVICE TAX, KOLKATA. [2024 (7) TMI 1533 - CESTAT KOLKATA] where it was held that 'the electricity charges are not liable to service tax' - the demand of Service Tax of Rs.42,03,908/- confirmed on reimbursement of electricity charges is not sustainable. Accordingly, we set aside the demand on this count. Demand of Service Tax amounting to Rs.36,790/- on ‘signage charges’ under the category of ‘management, maintenance and repair service’ - HELD THAT:- This demand has been raised for the period from 01.10.2006 to 31.10.2009 by issuance of the Show Cause Notice dated 06.01.2012. It is observed that the entire issue of collection of signage charges was well within the knowledge of the Department and thus, suppression of facts with the intention to evade payment of tax has not been established in this case. Accordingly, this demand is not sustainable on the ground of limitation. Reversal of CENVAT Credit of Rs.30,534/- - HELD THAT:- The assessee has paid Service Tax on the full invoice value. However, in some cases, they have paid lesser amount to the service provider. This does not mean that the assessee is not entitled to avail full Service Tax credit which has been paid to the exchequer. Accordingly, the demand for reversal of CENVAT Credit of Rs.30,534/- confirmed in the impugned order is not sustainable. Interest - penalty - HELD THAT:- As the demand itself is not sustainable, the question of demanding interest or imposing penalty does not arise. Accordingly, all the penalties imposed in the impugned order are set aside. The appeal filed by the appellant - assessee is allowed. Issues Involved:1. Demand of Service Tax on car parking charges under the category of 'renting of immovable property service'.2. Demand of Service Tax on reimbursement of electricity charges under the category of 'management, maintenance and repair service'.3. Demand of Service Tax on signage charges under the category of 'management, maintenance and repair service'.4. Reversal of CENVAT Credit.5. Interest on the demand of Service Tax on reimbursement of electricity charges.Issue-wise Detailed Analysis:1. Demand of Service Tax on Car Parking Charges:The appellant-assessee was demanded Service Tax amounting to Rs. 8,99,864/- on car parking charges under the category of 'renting of immovable property service'. The assessee argued that this issue is no longer res integra as the Hon'ble Delhi High Court had decided in favor of the assessee in Mahesh Sunny Enterprises P. Ltd. v. Commissioner of Service Tax, New Delhi [2014 (34) S.T.R. 21 (Del.)], which excluded parking services from the taxable service definition. The Tribunal observed that the demand is also hit by limitation since a previous Show Cause Notice dated 31.12.2008 was already issued on the same matter, referencing the decision of the Hon'ble Apex Court in Nizam Sugar Factory v. Collector of Central Excise, A.P. [2006 (197) E.L.T. 465 (S.C.)]. Therefore, the demand was not sustainable on both the grounds of the merits and limitation.2. Demand of Service Tax on Reimbursement of Electricity Charges:The appellant-assessee was demanded Service Tax amounting to Rs. 42,03,908/- on reimbursement of electricity charges under the category of 'management, maintenance and repair service'. The assessee contended that these charges were collected on an actual consumption basis and paid to CESC Limited, acting as a 'Pure agent'. The Tribunal found that this issue was already decided in favor of the assessee in Choicest Enterprises Limited v. Commissioner of Service Tax, Kolkata, where it was held that no service tax is payable for providing electricity as it amounts to the sale of goods, not the supply of service. Thus, the demand was set aside.3. Demand of Service Tax on Signage Charges:The appellant-assessee was demanded Service Tax amounting to Rs. 36,790/- on signage charges under the category of 'management, maintenance and repair service' for the period from 01.10.2006 to 31.03.2009. The assessee argued that the demand was barred by limitation as the Show Cause Notice was issued on 06.01.2012. The Tribunal observed that the entire issue of collection of signage charges was well within the knowledge of the Department, and suppression of facts with the intention to evade tax was not established. Hence, the demand was not sustainable on the ground of limitation.4. Reversal of CENVAT Credit:The appellant-assessee was demanded a reversal of CENVAT Credit amounting to Rs. 30,534/-. The assessee submitted that they had paid Service Tax on the full invoice value and were thus eligible to avail full CENVAT Credit. The Tribunal observed that paying a lesser amount to the service provider does not disqualify the assessee from availing full Service Tax credit which has been paid to the exchequer. Therefore, the demand for reversal of CENVAT Credit was not sustainable.5. Interest on the Demand of Service Tax on Reimbursement of Electricity Charges:The Revenue filed an appeal against the non-charging of interest on the Service Tax amount of Rs. 42,03,908/- confirmed towards reimbursement of electricity charges. Since the demand itself was set aside, the Tribunal held that the question of demanding interest does not arise. Therefore, the appeal filed by the Revenue was rejected.Conclusion:The Tribunal allowed the appeal filed by the appellant-assessee and set aside all the demands and penalties confirmed in the impugned order. The appeal filed by the Revenue was rejected. The operative part of the order was pronounced in open court.