TaxTMI 
TaxTMI 
2026 (6) TMI 1298
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....ice Tax of Rs. 14,59,61,300/-. The appellant submitted their detailed reply contesting the demand both on merits as well as on account of limitation. The Adjudicating authority after due process, confirmed the demand along with interest and penalty. Being aggrieved, the appellant filed their appeal before the Tribunal, which came to be dismissed on account of non-compliance of the pre-deposit condition. Thereafter the appellant filed their appeal before the High Court, which directed them to approach the Tribunal after making the requisite pre-deposit. After complying with the pre-deposit requirement before the Tribunal, the appeal has come up for hearing before the Tribunal now. 2. The Ld. CA and the Advocate appearing for the appellant, made the following submissions: 2.1. The Appellant, Bihar State Sugar Corporation Ltd. ("BSSC"), is a Government Company, incorporated in the year 1974 to manage, operate and control loss-making sugar and distillery units under the control of the Government of Bihar. By the Bihar Sugar Undertakings (Acquisition) Act, 1985 (hereinafter referred to as "the Acquisition Act"), the Sugar Industries inter alia situated at Raiyam (District Madhuban....
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....r use in the course or furtherance of business or commerce would by itself constitute a taxable service and be eligible to service tax under the said Act. Pursuant to this judgment, the Parliament through the Finance Act, 2010 amended Section 65(90a) and Section 65(105)(zzzz) with retrospective effect from 01.06.2007, to overcome the Delhi High Court's ruling. The amendment redefined 'taxable service' so that a service provided "by renting of immovable property or any other service in relation to such renting" for use in the course of or for furtherance of business or commerce was brought within the tax net. Significantly, the Finance Act, 2010 itself declared: "No act or omission on the part of any person shall be punishable as an offence which would not have been so punishable had this amendment not come into force." This retrospective amendment was again challenged before the Delhi High Court in Home Solutions Retail India Ltd. vs. Union of India [W.P.(C) No. 3398/2010], wherein interim stay was granted on 18.05.2010. 2.7. Thus, during the entire period of the alleged default (28.03.2008 to 25.03.2011), the taxability of renting of immovable property was under a judicial clou....
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....14 (36) STR 37 (Cal.)] decided on 30.04.2014. 2.11. In view of the above submissions, the demand for the extended period cannot be sustained on account of time-bar. Since the Show Cause Notice has been issued on 09.10.2012, at that time the unamended Section 73 resulted in setting aside the entire demand even for the normal period, if the extended period is found to not invokable. Accordingly, it is prayed that the entire confirmed demand may be held as time barred and the appeal may be allowed. 3. The Ld AR submitted that the appellant is a Public Sector Undertaking. They have leased out the factory premises to various other commercial entities. For the lease amount received as consideration, the appellants are bound to pay the Service Tax. There is no exemption available to the appellant as a Govt owned PSU from payment of Service Tax. The Agreements show that the leasehold consists of the entire factory premises including all the plant, godowns and barren land. Therefore, the appellant is not correct to state that only the land has been leased out. Further only on account of detailed verification, the contravention of non-payment of Service Tax has come to light. Therefore....
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....to various other PSUs / Private entities. 9.2. Renting of Immovable service was indeed under litigation and as a matter of fact in the case of Home Solution Retail India Ltd. & Ors vs. Union of India [2009 (14) STR 433 (Del.)], on 18.04.2009, the Delhi High Court struck down the levy of service tax on renting of immovable property as "ultra vires" the Finance Act, 1994, holding as under: 35. From this analysis, it is clear that we have to understand as to whether renting of immovable property for use in the course or furtherance of business or commerce by itself is a service. There is no dispute that any service connected with the renting of such immovable property would fall within the ambit of Section 65(105)(zzzz) and would be 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. Consequen....
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....ed in this case. Consequently, the confirmed demand for the extended period gets aside on this ground. 11. Now coming to the argument about the effect of setting aside of the extended period demand on the normal period demand, we find that the amendment was carried out by way insertion of sub-Section (2A) to Section 73 with effect from 10th May 2013, which reads as under : "(2A) Where any appellate authority or tribunal or court concludes that the notice issued under the proviso to sub-section (1) is not sustainable for the reason that the charge of,- (a) fraud; or (b) collusion; or (c) wilful misstatement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or the rules made thereunder with intent to evade payment of service tax, has not been established against the person chargeable with the service tax, to whom the notice was issued, the Central Excise Officer shall determine the service tax payable by such person for the period of eighteen months, as if the notice was issued for the offences for which limitation of eighteen months applies under subsection (1)."; 12. There....