2017 (8) TMI 109 - AT - Service Tax

Renting of Immovable Property Services - Joint ownership - benefit of small scale exemption upto 10 Lakhs to each owner - N/N. 06/2005-ST dt. 01.03.2005 - Held that - the identical issue came up before this Tribunal in the case of Anil Saini and Others Vs. CCE Chandigarh-I 2017 (1) TMI 101 - CESTAT CHANDIGARH where it was held that co-owners of the property cannot be considered as liable to pay Service Tax (jointly or severally) as the Revenue has identified the services provider and the service recipients for imposing the Service Tax liability which are individuals thus the Service Tax liability is not sustainable. The demand of Service Tax against the appellants is not sustainable as the appellants are entitled to benefit of N/N. 06/2005-ST dt. 01.03.2005 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of Service Tax under Renting of Immovable Property Services.

Analysis:
The appellants collectively own a property and received rent from a tenant. The Revenue claimed Service Tax as the total rent exceeded the threshold limit specified in Notification No. 06/2005-ST. The appellants argued that each co-owner received rent individually below the exemption limit. The Tribunal referred to a similar case and held that co-owners cannot be jointly liable for Service Tax. The Tribunal noted that for subsequent years, the appellants had paid Service Tax exceeding the exemption limit. The Tribunal found the demand unsustainable and set aside the impugned orders, granting relief to the appellants.

Conclusion:
The Tribunal ruled in favor of the appellants, stating that co-owners cannot be collectively liable for Service Tax. The Tribunal considered individual rental receipts and the benefit of Notification No. 06/2005-ST. The demand of Service Tax was deemed unsustainable, and the impugned orders were set aside, allowing the appeals with consequential relief.