2018 (5) TMI 561 - AT - Service Tax

Extended period of limitation - suppression of facts - renting of immovable property service - Held that - invoking the extended period of limitation is justified because the assessee has failed to disclose that they are liable to pay the service tax, as service tax was imposed on renting of immovable property from the year 2006 onwards - they have not filed the ST-3 returns also - the reasoning given by the original authority invoking the extended period is justified - decided in favor of Revenue. Valuation - inclusion of security deposit - Held that - security deposit not to be included in the gross value of the taxable service - reliance placed in the Division Bench judgment in the case of Samir Rajendra Shah vs. CCE 2014 (11) TMI 499 - CESTAT MUMBAI - decided against Revenue. The fact that Stylus Animation College and Lakshmi Memorial Educational Trust fall in the category of Educational Institution or not, the original authority has not given the finding based on any evidence and the assessee says that they have sufficient evidence to prove that both these institutions fall in the definition of Educational Institution - the matter is remanded back to the original authority to decide whether these institutions fall in the definition of Educational Institutions after considering the documents which may be produced by the assessee. Appeal allowed by way of remand.

Summary

Issues:
Revenue's appeal against the Commissioner (A)'s order setting aside the demand on limitation without considering the merits of the case.

Analysis:
The case involved a dispute regarding service tax on renting of immovable property services. The Revenue issued a show-cause notice to the assessee for non-payment of service tax, leading to a demand of ?12,42,776 for the period June 2007 to March 2011. The original authority confirmed the demand, but the Commissioner (A) set it aside on the grounds of being barred by limitation.

The Revenue contended that the impugned order failed to appreciate the facts and law, asserting that the assessee suppressed material facts to evade service tax payment. They argued that the extended limitation period was justified due to the assessee's non-compliance with registration and tax payment requirements. The Revenue cited legal precedents to support their position.

On the other hand, the respondent's consultant defended the order, claiming that the demand was time-barred as there was no concealment from the department. They also highlighted discrepancies in rent quantification and inclusion of refundable security deposits in taxable amounts. The consultant argued that certain institutions were exempt from service tax as recognized educational institutions, supported by legal judgments.

After hearing both parties, the Tribunal found the extended limitation period justified due to the assessee's non-disclosure of tax liability and failure to file returns. The inclusion of security deposits in taxable value was deemed incorrect based on legal precedent. The Tribunal remanded the issue of educational institution status back to the original authority for further review based on evidence presented by the assessee. The Revenue's appeal was allowed for a re-quantification of any demand, excluding security deposits from taxable service value.