AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 150
X X X X Extracts X X X X
X X X X Extracts X X X X
....to Service Tax. 2. Learned Counsel for the appellant submits that at the relevant time, the levy of Service Tax on renting of immovable property itself became the subject matter of vide spread litigation across the country. The Hon'ble Delhi High Court in M/s Home Solutions Retail India Ltd., Vs Union of India repaired in 2010 (19) STR 3 9 (Del) held that mere renting of immovable property could not regarded as a taxable services. Subsequently, the Parliament amended the definition of taxable service under Section 65 (1050 (zzzz)) of the Finance Act, 1994, through the Finance Act, 2010, giving the levy retrospective effect from 01.06.2007. The appellant themselves had also challenged the levy before the Jurisdictional High Court by filing writ petition no.15238 of 2010, wherein, interim stay was granted against the collection of Service Tax. However, subsequently the appellant with-drew writ petition and discharged the entire Service Tax liability amounting to Rs. 5,41,54,258/- along with applicable interest. 3. Learned Counsel for the appellant submits that despite the above payment, the Department went ahead and issued Show Cause Notice dated 20.04.2012, proposing confirmat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and only) under Section 77 of the Finance Act, 1994 for non-filing of ST-3 Returns within the prescribed dates, for each return. 5. Aggrieved by the above order the appellant has filed this appeal before the Tribunal. 6. Learned Counsel for the appellant submits that the entire Service Tax along with applicable interest has been paid during 28.03.2008 to 03.09.2010. Learned Counsel for the appellant submits that the dispute arose only due to the retrospective amendment introduced by the Finance Act, 2010 which expanded the scope of renting of immovable property service with retrospective effect from 01.06.2007. Learned Counsel for the appellant has placed reliance on the following decisions: i) Sethi Tools Pvt Ltd., Vs Commissioner of Central Excise, Customs and Service Tax - Vadodara - II [2015 (9) TMI 633 - CESTAT Ahmedabad] ii) Varun Motors Vs Commissioner of Customs & Central Excise, Visakhapatnam - GST [2018(110 TMI 1523 - CESTAT Hyderabad] iii) Haresh Kishor Vs the Commissioner of G.S.T. & Central Excise, Chennai North Commissionerate [2019 (1) TMI 1310 - CESTAT Hyderabad] iv) Chandra Container Manufacturers, Medak District Vs The Com....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... amendment in the Finance Act, 2010, imposed the levy retrospectively with effect from 01.06.2007. Thus, the dispute during the relevant period was essentially of interpretational nature and arose due to retrospective amendment and there were divergent views and judgments on the issue by different Tribunals and Courts. 14. The Hon'ble Supreme Court in Star India Pvt Ltd., Vs Commissioner of Central Excise, supra, held that penalty ordinarily is not to be imposed where the liability arise due to retrospective amendment of law. The relevant para of above judgment as thus: "7. In any event, it is clear from the language of the validation clause, as quoted by us earlier, that the liability was extended not by way of clarification but by way of amendment to the Finance Act with retrospective effect. It is well established that while it is permissible for the legislature to retrospectively legislate, such retrospectively is normally not permissible to create an offence retrospectively. There were clearly judgments, decrees or orders of courts and Tribunals or other authorities, which required to be neutralised by the Validation Clause. We can only assume that the judgments, d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....operty' before introduction of Sec 80(2) cannot be put at a disadvantage vis-vis a tax payer who delayed and paid tax on the same service after 06.03.2012. Further, there was a dispute on the levy of Service Tax on 'Renting of Immovable Property' and the same was brought to the notice of the department by the appellant through a letter dated 12.06.2008. Accordingly, it has to be held that appellant had a reasonable cause for non-payment of tax during the relevant period. For such an eventuality waiver from penalties was always available under Section 80 of the Finance Act, 1994 even before the introduction of Section 80(2)." 19. Similar views have been taken in Varun Motors, supra and Haresh Kishor, supra. The dispute is on account of the fact that though they have paid the duty to the extent required to be paid by them after deducting certain amount for the period when the Service Tax was not leviable or to the extent paid through Cenvat Credit or in terms of certain exemptions. Be the case as may, fact remains they have not discharged full Service Tax and interest, as such, and hence cannot be strictly covered within the provisions of Section 80(2) of Finance Act, 1994. Their ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that they were not required to pay the entire amount, as demanded under RIPS, once following factors are taken into consideration: a) Cenvat Credit of Rs. 15,07,913/- which cannot be denied under Rule 9 (bb) as the said provision came which effects from 01.04.2011 whereas, the appellant had availed the credit during the 2008-09 to 2010-11. (b), the demand of Rs. 30,15,438/- was made for the period April, 2007 and May, 2007, which is even before the levy of Service Tax itself w.e.f 01.06.2007, as supported by CA certificate. (c) No Service Tax is leviable on the amount received from Andhra Pradesh State Housing Corporation, Kakinada, since, the premises was rented for storage of rice and exempted in terms of Board Circular F.No. B-II/1/2002TRU(III) dated 01.08.2002. Thus, if these were to be considered and eligible, they would have been eligible under Section 80(2) itself. However, notwithstanding this, their eligibility in terms of section 80(1) / Section 80, as existed during material time also merits consideration. 22. We find in the facts of the case penalty under Section 78 itself is not sustainable as the issue is that of interpretation and the....