2018 (11) TMI 1600 - AT - Service Tax

Imposition of penalties - sale of space or time for advertisement - case of appellant is that they being statutory bodies cannot be attributed with any mala fide intention so as to invoke the penal provision against them - Held that - Tribunal in the case of Nagpur Municipal Corporation v. Commissioner of Customs & Central Excise 2017 (8) TMI 548 - CESTAT MUMBAI has observed that the corporation being a statutory body and having bona fide belief of non-applicability of Service Tax penalty is not imposable - penalty set aside - demand of service tax with interest upheld - appeal allowed in part.

Summary

Issues:
1. Tax liability on the services of "sale of space or time for advertisement."
2. Demand of Service Tax under the category of "renting of immovable property service" and imposition of penalty.

Analysis:
1. The judgment addresses the issue of tax liability on the services of "sale of space or time for advertisement." The Tribunal observed that the tax liability was confirmed against the assessee, but it was settled through various Tribunal decisions that such activities, discharged under statutory duties, are not taxable. Citing precedents like M/s.Pimpry Chinchwad Municipal Corporation v. CCE, Pune, the Tribunal held that charging fees for such services did not amount to any taxable service. Consequently, the demand of Service Tax on this count was deemed unsustainable, and the same was set aside along with interest and penalty.

2. The judgment also delves into the demand of Service Tax under the category of "renting of immovable property service" and the imposition of penalty. The appellants had not contested the demand before the Commissioner(Appeals) but requested a re-quantification by extending the small scale exemption limit Notification. The plea was accepted, reducing the demand to &8377;50,121/- with an identical penalty. The appellants challenged the imposition of penalties, arguing that being statutory bodies, they lacked mala fide intention to invoke penal provisions. Referring to the case of Nagpur Municipal Corporation v. Commissioner of Customs & Central Excise, the Tribunal noted that penalties are not imposable on statutory bodies with a bona fide belief of non-applicability of Service Tax. Following this reasoning, the penalty was set aside while confirming the demand of Service Tax under the category of "renting of immovable property."

In conclusion, the judgment resolved the issues by setting aside the demand of Service Tax on the services of "sale of space or time for advertisement" and the penalty associated with the demand under the category of "renting of immovable property service." The decision was based on legal precedents and considerations of the nature of the services provided by the appellants as statutory bodies.