2019 (2) TMI 1347 - AT - Service Tax

Liability of service tax - advance deposit received for Renting of Immovable Property Services - Held that - The demand is on the advance amount received by the appellants for renting out their immovable property - The said issue is covered by the decision in M/s. Satya Prakash Builder Ltd. Vs. C.C.E. & S.T., Bhopal 2018 (8) TMI 622 - CESTAT NEW DELHI , where it was held that The demand raised in the impugned order is erroneous being made on the refundable security deposit. Such refundable amount cannot form consideration as defined under Section 67 - the demand cannot sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether service tax is liable to be paid on the advance deposit received for Renting of Immovable Property Services.

Analysis:
The case involved the appellants who had let out their premises under a lease agreement and received advance deposit as well as rents. The Department contended that the appellants were liable to pay service tax on the advance amount received. A Show Cause Notice was issued, demanding service tax, interest, and penalties. The Original Authority confirmed the demand, and the Commissioner (Appeals) upheld it, leading to the current appeal.

The appellant's counsel argued that the issue of service tax on advance deposits for Renting of Immovable Property Services had been addressed in previous Tribunal decisions, specifically mentioning cases from CESTAT New Delhi and CESTAT Mumbai. The respondent, represented by the AR, supported the findings in the impugned Order.

After hearing both sides, the Tribunal observed that the demand was based on the advance amount received for renting out the immovable property. Considering the decisions cited by the appellant's counsel, the Tribunal agreed that the demand could not be sustained and needed to be set aside. Consequently, the appeal was allowed with any consequential reliefs as per the law.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the demand for service tax on the advance deposit for Renting of Immovable Property Services based on precedents cited in previous Tribunal decisions.