TaxTMI 
TaxTMI 
2026 (1) TMI 955
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....out certain premises owned by them and for the purpose of payment of service tax on the taxable service of 'renting of immovable property' have duly registered under jurisdictional Service Tax authorities holding centralized Registration No. AABCA9521EST009. 2.3 During the course of Central Receipt Audit (CERA) conducted on the records of the appellants for the Financial Years (FY) 2014-2015 to 2016-2017, the audit officers had observed that there is a difference in the figures of rental income indicated in the Profit & Loss Account and the ST-3 returns filed for the period. On the basis of CERA Audit report, the department had issued Show Cause Notice (SCN) dated 31.12.2020 to the appellants for recovery of short paid service tax of Rs.6,68,666/- by invoking extended period on the ground of suppression of details of taxable service, along with interest and for imposition of penalty on the appellants. The said SCN was adjudicated by the original authority i.e., Assistant Commissioner, Division-III, Mumbai Central CGST & Central Excise Commissionerate in confirmation of the demand of service tax amounting to Rs.91,605/- under Section 73(1) of the Finance Act, 1994 along with inte....
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....re exists the need to re-evaluate the demand as below:.... xxx xxx xxx xxx 31. I observe that there is no dispute that rental income is not taxable in view of notification No.12/2017-Central Tax (Rate)..... specifies that "services by way of renting of residential dwelling for use as residence" attract 'NIL' rate of tax. However, I find that the rental income shown by the tax payer under residential accommodation provided to their employees at Sikkim plant is less than the income as claimed in the show cause notice. Therefore the differential income of shown at above table is taxable under the service tax regime. xxx xxx xxx xxx 38. In the present case I find that income of Rs.19,00,000/- pertains to liquidated damages against the breach of contractual agreement by their tenant which is other than the compensation amount per month against the lease/ rental charges of commercial property. In view of the above the proportionate tax demand is required to be dropped as the same is not taxable. 39. In view of the foregoing paras, I find that the tax demand is required to revalued to Rs. 91,605/- from Rs.6,68,666/-." xxx xxx xxx xxx ....
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....xtended period etc. I find that such shallow defense weakens the case of the Appellant and makes the Appellate Authority to give leverage to the Adjudicating Authority. Therewithal, the Appellant chose to not attend any of the personal haring opportunities granted to them and have also not submitted any concrete stand against the allegations confirmed in the impugned Order. I find that I also have no material record at hand to discuss considering that the case demands to proceed and issue an ex-parte Order. As a result, I am inclined to consider that the Order issued by the Adjudicating Authority is a legal and proper speaking order and given the aptitude incorporated in it, the same is adjudged to be upheld. Hence, apropos to the aforesaid discussions, the Appeal filed by the Appellant is liable to be rejected. The Appeal is, accordingly, disposed of in the above manner." 5. The short issue for determination before the Tribunal is whether the appellants are liable to pay service tax, in respect of the value of taxable service of renting of immovable property alleged to have been not shown in the ST-3 Returns by suppression, as opposed to the figures shown in their Prof....
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....014-2015 5,46,274 4,36,869 1,09,405 13,522 2015-2016 4,56,883 4,55,897 986 143 2016-2017 30,46,394 30,95,310 (-48,916) 0 2017-2018 (upto June,2017) 5,19,599 - *5,19,599 77,940 Total 45,69,150 6,29,990 91,605 *Entire amount taken on the ground that the appellant did not give the details. 8.2 In order to appreciate the basis for arrival of difference of income which was demanded in the SCN, and subsequently confirmed in the adjudication proceedings as given in the table at paragraph 8.1 above, I would like to refer to the values taken as the basis for imposition of service tax levy as provided in the SCN dated 31.12.2020 and the details of value of the amounts shown in the Financial Records of the appellants for the relevant financial years. These are captured and given below: Financial Year Income received from rent, taken from P&L account as per SCN Rental income as per Financial Statements & detailed leger of Appellants Rental income as ST-3 Returns filed by the Appellants Actual Difference in ST-3 & P/L Account....