2019 (3) TMI 1228 - AT - Service Tax

Classification of services - Renting of Immovable Property service or Business Support Services - appellant was allowing certain people to keep their goods in the said rented shop for further sale - extended period of limitation - Held that - The extended period cannot be invoked against statutory body. Inasmuch as, no contumacious conduct or suppression of facts can be attributed to them. If any part of the demand falls within the limitation period, the original adjudicating authority would calculate the same and intimate the appellant, who would pay the same along with interest - appeal disposed off.

Summary

Issues:
1. Taxability of renting of immovable property and business support services.
2. Applicability of extended period of limitation for demand raised.
3. Allegations of malafide against a state corporation.
4. Setting aside the impugned order on the point of limitation.

Analysis:
1. The appellant, a UP State Government Corporation, rented shops during 2009-14, which was considered liable to service tax under "Renting of Immovable Property." Additionally, the appellant allowed others to keep goods in the rented shops for sale, leading to a view by revenue that it fell under "Business Support Services."

2. Proceedings were initiated against the appellant with a show cause notice dated 24.04.2015 for demands under both categories for the mentioned period. The appellant contested the demand on the grounds of limitation, stating that being a statutory body, no suppression or misstatement was intended. The confusion regarding the taxability of the service during that period was highlighted.

3. Despite the appellant's contentions, the lower authority confirmed the demand and imposed penalties. The appellant challenged the categorization of "Business Support Services," arguing that it primarily fell under "Renting of Immovable Property." The appellant emphasized being a UP State Corporation and cited precedents to support that statutory bodies cannot be accused of malafide for tax non-payment.

4. The Tribunal referred to a previous decision where it was held that the extended period of limitation cannot be invoked against a statutory body without contumacious conduct or suppression of facts. Relying on this precedent, the Tribunal set aside the impugned order, deeming the demand barred by limitation. The appeal was allowed, with instructions for the adjudicating authority to re-determine any payable amount falling within the limitation period.