2017 (1) TMI 303 - AT - Service Tax

Renting of Immovable Property service - collection of excess amounts from clients - deduction of the amount of the property tax - Held that - it is the fact that the appellant had collected excess service tax from the clients which they have returned to them by way of credit to their account. In these circumstances it is obvious that the invoices issued and the assessment made by the appellant has not been changed. It is possible that the clients would have taken the credit of service tax shown in the invoices. The appellants have not got the invoices reassessed for the revised value. The order of the lower authority is therefore sustained - appeal rejected - decided against appellant.

Summary

Issues:
1. Claim of deduction of property tax under Notification 24/2007-ST.
2. Confirmation of service tax collected by the appellant.
3. Imposition of interest and penalty under Section 77(2) of the Finance Act, 1994.

Analysis:

1. Claim of deduction of property tax under Notification 24/2007-ST:
The appellant, engaged in providing taxable services of 'Renting of Immovable Property,' claimed deduction of property tax amount paid under Notification 24/2007-ST read with Rule 6(4C) of the Service Tax Rules, 1994. However, the Central Excise duty paid to Revenue was done after claiming the abatement of property tax. The Revenue confirmed the service tax collected by the appellant from clients under Section 73A(3) of the Finance Act, 1994. The appellant contended that they had returned the excess amount collected to the clients, but the Tribunal observed that the invoices issued and the assessment made by the appellant had not been revised, leading to the sustained order of the lower authority.

2. Confirmation of service tax collected by the appellant:
The appellant had collected excess service tax from clients, which they later returned by crediting the amount to the clients' accounts. The Tribunal noted that the invoices issued by the appellant had not been reassessed for the revised value, and it was possible that the clients had already taken credit for the service tax shown in the original invoices. Consequently, the Tribunal upheld the confirmation of service tax collected by the appellant, leading to the rejection of the appeal.

3. Imposition of interest and penalty under Section 77(2) of the Finance Act, 1994:
In addition to confirming the service tax collected by the appellant, the Revenue had imposed a penalty of &8377;10,000 under Section 77(2) of the Finance Act, 1994. The Tribunal, after considering the arguments presented by both parties, sustained the lower authority's order, which included the imposition of the penalty. The appellant's appeal was rejected based on the findings related to the excess service tax collection and the failure to reassess the invoices for the revised value.

In conclusion, the Tribunal's decision in this case focused on the appellant's claim for deduction of property tax, confirmation of excess service tax collection, and the imposition of penalty under Section 77(2) of the Finance Act, 1994. The Tribunal upheld the lower authority's order due to the failure to revise the invoices despite returning the excess amount collected to the clients, leading to the rejection of the appellant's appeal.