2017 (2) TMI 948 - AT - Service Tax

Condonation of delay - renting of immovable property - appellant is a statutory body under the UP Krishi Utpadan Mandi Adhiniyam, 1964 - when the authority performs a service, which is not in the nature of actually statutory and the same is undertaken for a consideration not in the nature of statutory free or levy, then in such cases whether the service tax would be leviable, if the activity undertaken falls within the ambit of a taxable service? - Held that - The issue herein is squarely covered by the precedent order of this Tribunal being Final Order No.70969/2016 dated 02/06/2016 wherein in the case of another similarly situated appellant, also a statutory body under the same Act, this Tribunal was pleased to condone the delay in filing the appeal and allowed the appeal. Extended period of limitation - levy of penalty - Held that - the issue herein is squarely covered by the precedent order of this Tribunal, wherein in the case of another similarly situated appellant M/s Krishi Utpadan Mandi Samiti Versus Commissioner of Central Excise & S. Tax, Kanpur 2016 (12) TMI 793 - CESTAT ALLAHABAD , which is also a statutory body under the same Act, this Tribunal was pleased to condone the delay in filing the appeal and allowed the appeal in part holding that there is no contumacious conduct under the facts and circumstances hence the extended period of limitation is not invocable and further was pleased to delete all the penalties - There is no contumacious conduct and/or suppression of facts on the part of the appellant, which is a statutory body - appeal allowed by way of remand.

Summary

Issues:
1. Appeal against dismissal as time-barred
2. Taxability of services under Renting of Immovable Property
3. Applicability of service tax on a statutory body
4. Calculation of duty on a cum duty basis
5. Condonation of delay in filing appeal

Issue 1: Appeal against dismissal as time-barred
The appellant, a statutory body under the UP Krishi Utpadan Mandi Adhiniyam, appealed against the dismissal of their appeal as time-barred by the learned Commissioner (Appeals). The appeal was dismissed due to being filed beyond the statutory period of 60 days + 30 days allowed for condonation.

Issue 2: Taxability of services under Renting of Immovable Property
The revenue found that the appellant provided taxable services under Renting of Immovable Property to various clients, evading service tax from 01/06/2007 to March 2012. The appellant did not register or file returns during the extended period. The demand was raised for ?13,02,072/- towards tax Education-Cess, and penalties were proposed under Sections 76, 77, and 78 of the Act.

Issue 3: Applicability of service tax on a statutory body
The appellant contended that being a statutory body under the State Act, their activities were in the public interest and mandatory under relevant statutes. Citing CBEC Circular No. 89/7/2006 ST, they argued that activities performed by a sovereign/public authority under law did not constitute taxable services. The Additional Commissioner confirmed the demand and imposed penalties.

Issue 4: Calculation of duty on a cum duty basis
The Tribunal referred to a previous order involving a similar appellant, also a statutory body, where the delay in filing the appeal was condoned, and penalties were deleted. Relying on this precedent, the Tribunal allowed the current appeal in part, holding that there was no contumacious conduct, and the extended period of limitation was not applicable. The matter was remanded for re-determination of the service tax payable on a cum duty basis.

Issue 5: Condonation of delay in filing appeal
The Tribunal allowed the appeal in part, noting no suppression of facts by the appellant, a statutory body. The impugned order was set aside, and the matter was remanded for re-determination of service tax payable for the normal period. All penalties were deleted, and the appellant was directed to appear before the adjudicating authority for a reasoned order within 90 days. The appeal was allowed in part, and the stay application was disposed of.