2023 (12) TMI 122

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....ve been confirmed in the impugned order: Demand (Figures in Rs. ) Category Demand Remarks Supply of Tangible Goods 28,21,087 Entire tax and interest paid before issuance of SCN Business Support Services 16,547 Entire tax and interest paid before issuance of SCN Consulting Engineer Services 1,47,305 Entire tax and interest paid before issuance of SCN Renting of Immovable Property (other than received from contractors) 2,41,079 Entire tax and interest paid before  issuance of SCN Renting of Immovable Property from contractors 20,83,934 This is being contested T....

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....ntractors, which has been confirmed in the impugned order under Renting of immovable property service'. Aggrieved against the confirmation of demand under the category of 'Renting of Immovable property Service', the Appellant filed this appeal.. 4. In their grounds of appeal, the appellant submits that the quarters were used by the employees of the contractors only for residential purpose and not as factories, office buildings, warehouses, theatres, exhibition halls and multiple-use buildings so as to constitute for use in the course of furtherance of business. Thus, they contended that the activity of renting of quarters for residential purpose would not be liable to service tax. It is their contention that the term immovabl....

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....ided its quarters on rent for residential purpose to the employees of its contractors. The said quarters were also supposed to be provided on rent subject to availability. 8. We observe that the OIO confirms the demand on the basis that the contractor mush have considered the eventual expenses towards rent which would ensure furtherance of business or commerce is completely irrelevant inasmuch as the occupation of the contractor has no relevant but the actual usage of the immovable property whether for residential purpose or used in further of commerce or business will decide the leviability of service tax 9. We observe that the issue has been squarely covered by the decision in the case of Senior Accounst Officer. M.P. Power Generati....

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....l usage of the property for a particular purpose will decide the nature, either 'residential' or used in 'furtherance of commerce or business'. The nature of contracting parties or the occupation of the occupant has no relevance to decide the scope of the tax entry." 10. Following the above decision, we hold that the demand of Rs.20,83,934/- along with interest confirmed in the impugned order under the category of 'Renting of Immovable Property Service' is not sustainable. Since the demand itself is not sustainable, the demand of interest and imposition of penalty on this amount is also not sustainable. 11. With regard to imposition of penalty of Rs. 32,26,018/- under Section 78 of the Finance Act, the Appellant submitted that....