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2018 (11) TMI 1036 - AT - Service TaxRenting of immovable property service - non-discharge of service tax - case of appellant is that area occupied by TNPL is only 9 acres. Hence, as per the agreement, the monthly rent for the 9 acres of land i.e. 9 acre x ₹ 1200 and not as 40 acre x ₹ 1200 as alleged in the notice. Held that - The appellant has been contending right from the reply to the SCN that the agreement in question is only for renting of 9 acres of land as per their letter dt. 06.02.2001 addressed to TNPL and also have submitted TNPL s confirmatory letter dt. 10.02.2001 - sufficient proof has been submitted by the appellants in support of their contention. Thus, the appellants have only rented out 9 acres of land to TNPL and that service tax liability for the impugned period has already been discharged by them - demand set aside - appeal allowed - decided in favor of appellant.
Issues:
Interpretation of rental agreement for land lease with TNPL, calculation of service tax liability, submission of documentary evidence, consideration of subsequent proceedings by Commissioner (Appeals). Analysis: The case involved an agreement between the appellants and TNPL for renting land, leading to a service tax dispute. The department issued a show cause notice proposing a service tax liability of ?1,18,656 with interest and penalties. The appellants contended that TNPL occupied only 9 acres, not 40 acres, reducing the rent amount to ?26,706, supported by documentary evidence. The original authority upheld the demand, but the lower appellate authority also rejected the appeal. During the hearing, the appellants reiterated their stance, presenting letters confirming the 9-acre occupancy by TNPL. The department argued based on the agreement for 40 acres and the subsequent order by the Commissioner (Appeals). The Tribunal acknowledged the appellants' evidence, noting the acceptance of their plea in a later order. Consequently, the Tribunal ruled in favor of the appellants, holding that they rented out only 9 acres, discharged the service tax liability, and set aside the impugned order. The appeal was allowed with appropriate relief as per the law.
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