2020 (8) TMI 640 - AT - Service Tax

Rectification of mistake - mistake apparent on the face of record - applicability of extended period of limitation is not denied - HELD THAT - From the facts on record as recorded in the Final Order in para 3 (d), and further the pleadings of the appellant recorded in para 11, it is apparent that the movable goods whatsoever as aforementioned, the possession and control is transferred to the lessee. Thus, we find that there is apparent mistake on record in the observation of this Tribunal that the movable goods are in the constructive possession of the appellant lessor. Accordingly, we allow this ground. Extended period of limitation - HELD THAT - Tribunal have not decided the ground on applicability of extended period of limitation. From the facts and circumstances, we find that the appellant was registered with the Service Tax Department since 07.02.2008 in the category of management consultancy, renting of immovable property, club/ association membership, tour operator, health club, bar association etc. The accounts of the appellant have been audited by the Central Excise Department from time to time till 2011. Further, the period under dispute is from August, 2008 to June, 2012. Thus, the affairs of the appellant were in the knowledge of the Department - all the transactions have been duly recorded in the books of the account maintained in the regular course of business - no case of suppression or fraud or contumatious conduct is made out against the appellant - the extended period of limitation is not applicable. Application allowed.

Summary

Issues:
1. Liability for service tax on rented buildings under the Finance Act, 1994.
2. Eligibility for abatement of 40% from 01.07.2012.
3. Liability for service tax on letting out plant/machinery and fixtures.
4. Invokability of extended period of limitation.
5. Imposition of penalty under Section 77 and 78.

Analysis:

Issue 1 - Liability for service tax on rented buildings under the Finance Act, 1994:
The Tribunal examined whether rented buildings fell under the definition of immovable property, making the appellant liable for service tax. The Tribunal ruled in favor of the appellant on this issue.

Issue 2 - Eligibility for abatement of 40% from 01.07.2012:
The Tribunal also considered whether the appellant was eligible for a 40% abatement as per Notification No. 26/2012 from 01.07.2012. This issue was decided in favor of the appellant.

Issue 3 - Liability for service tax on letting out plant/machinery and fixtures:
Regarding the liability for service tax on letting out plant/machinery and fixtures, the Tribunal initially made an error in its observation. It was clarified that the effective control and possession of movable goods were transferred to the lessee, absolving the appellant of service tax liability under this head.

Issue 4 - Invokability of extended period of limitation:
The Tribunal did not initially decide on the applicability of the extended period of limitation. However, after reviewing the facts and circumstances, it was found that the extended period of limitation was not applicable as there was no evidence of suppression, fraud, or contumacious conduct by the appellant.

Issue 5 - Imposition of penalty under Section 77 and 78:
No specific mention of the imposition of penalties under Section 77 and 78 was made in the judgment, indicating that this issue might not have been relevant or raised during the proceedings.

The Tribunal allowed the rectification of mistake application filed by the appellant, modifying the Final Order to reflect the correct findings on the issues discussed. The judgment highlighted the importance of effective control and possession in determining service tax liability and emphasized the need for a clear understanding of the facts and circumstances before making a decision.