2014 (1) TMI 515

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....ilure to get registration with proper Central Excise authorities and discharged the Service Tax on their activity of renting of immovable property to their tenant. The Ld. Assistant Commissioner vide order dated 06.04.2009 confirmed the demand of Service Tax of Rs.2,62,650/- for the period June, 2007 to June, 2008 and interest of Rs.17,500/- only. He however noted that as soon as the assessee received the Notice and the matter was clarified by the department they got themselves registered and paid their entire Service Tax liability with interest on 16.09.2008 and therefore arrived on the conclusion that there were reasonable cause for their failure of not taking registration and non-payment of Service Tax for the above period. The case was ....

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....exigible to service tax. The question is whether renting of such immovable property by itself constitutes a service and, thereby, a taxable service. We have already seen that service tax is a value added tax. It is a tax on the value addition provided by some service provider. Insofar as renting of immovable property for use in the course or furtherance of business or commerce is concerned, we are unable to discern any value addition. Consequently, the renting of immovable property for use in the course or furtherance of business of commerce by itself does not entail any value addition and, therefore, cannot be regarded as a service. Of course, if there is some other service, such as air conditioning service provided along with the renting ....

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....yers who pay the Service Tax duty in accordance with the directions contained in the interim order passed by the Hon'ble Apex Court. The Ld.Advocate submits that from the Boards Circular it is obvious that there has been a confusion in the mind of the tax payers from the very beginning regarding taxability of the impugned activity of renting of premises. In view of these facts it is stated that imposition of penalty on the Appellants was not sustainable. 4. The Ld.A.R. reiterates the findings of the Ld. Commissioner. 5. Heard both sides. 5.1 I find that the Ld.Commissioner while imposing penalty had merely observed that the notice failed to discharge Service Tax as applicable and get themselves registered with the proper authority as th....