2018 (5) TMI 552 - AT - Service Tax

Business Support Services - contention of the appellant is that by providing land as also plant and machinery on rent basis, the services cannot be held to be fall in the category of business support services inasmuch as they have simplicitor rented the land and plant and machinery - Held that - the facts lead to the conclusion that the services undertaken by the appellant would fall under the category of renting of immovable property and supply of tangible goods. The explanation appearing under the definition of support services of business refers to altogether different circumstances wherein infrastructure is provided alongwith the office and other common utility to a person who is conducting his business from that place - The activity of renting of land and renting of plant and machinery cannot fall under the said explanation so as to recover by the definition of support services of business or commerce - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant provided support services of business or commerce to M/s Shree Radha Krishna Alloys Pvt. Limited?
2. Whether the services provided by the appellant fall under the category of renting of immovable property and supply of tangible goods?

Analysis:

Issue 1:
The appellant entered into an agreement with M/s Shree Radha Krishna Alloys Pvt. Limited for rendering land and supplying machines, plant, and equipment. The Revenue initiated proceedings against the appellant for confirmation of service tax and penalty under the view that the appellant provided 'support services of business or commerce.' The appellant contended that their services of renting land and supplying machinery should not be categorized as business support services. The appellant argued that renting of plant falls under 'renting of immovable property,' and supplying machinery falls under 'supply of tangible goods,' not 'support services of business or commerce.'

Issue 2:
The Revenue supported the lower authorities' findings and highlighted the explanation under the definition of 'support services of business or commerce.' The Tribunal considered the agreement between the parties and concluded that the services provided by the appellant were indeed renting of immovable property and supply of tangible goods. The Tribunal noted that the explanation under the definition of support services of business referred to different circumstances involving infrastructure provision along with office and common utilities, which did not apply to the appellant's activities of renting land and machinery. Therefore, the Tribunal found no merit in the Revenue's position and set aside the impugned order, allowing the appeal in favor of the appellant.