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2020 (11) TMI 44 - AT - Service TaxNon-payment of service tax - Revenue share - Fun factory - Reversal of Cenvat Credit on common input - Renting of immovable property - Parking fee - penalty. Revenue Share - HELD THAT - The issue of service tax on share of revenue from Joint commercial activity Food Court is already settled in favour of the appellant by the precedent order of this Tribunal dated 18.03.2019 in their own case 2019 (3) TMI 1182 - CESTAT HYDERABAD . Accordingly, the demand of ₹ 37,31,953/- is set aside. Rent from immovable property - HELD THAT - The value of ₹ 49,82,795/- is the amount of municipal taxes paid which is not taxable and is deductable amount from the rent receipt in terms of exemption granted vide Notification No. 29/2012-ST dated 20.06.2012 - the demand of ₹ 6,15,873/- is set aside. Taxability of receipts on Fun Factory - HELD THAT - This issue is already adjudicated in favour of the appellant in the precedent decision of this Tribunal dated 01.01.2019 2019 (1) TMI 71 - CESTAT HYDERABAD wherein the Tribunal held that receipts under this head are in the nature of receipt towards entertainment provided and the same is taxable under the State Entertainment Tax Act and hence not exigible to service tax. Parking receipts - HELD THAT - The appellant had paid the admitted tax of ₹ 22,17,764/- against the demand of ₹ 12,62,642/-. Hence, we hold that the service tax demanded vide the impugned order is not disputed, is taxable and paid. Further, admitted tax is more than the assessed tax. CENVAT Credit - Rule 6(3) of CCR - HELD THAT - Appellant have maintained separate account of input services and there is no utilisation of common input services towards providing of exempt services - Further it is found that although the appellant had prayed for verification of their records to verify the correctness of their claim, but no such opportunity was provided and by adopting a pedantic approach the demand was confirmed - Hence, this demand is set aside and the matter remanded without expressing any opinion on merits leaving the issue open to the adjudicating authority after following the principles of natural justice. Penalty - HELD THAT - The issue being wholly interpretational and there being no case of suppression, fraud etc., Penalty imposed under Section 76 and Rule 15(1) of Cenvat Credit Rules are fit to be set aside. Appeal allowed in part and part matter on remand.
Issues Involved:
1. Service tax on share of revenue from joint commercial activities. 2. Demand under Rule 6(3)(i) for alleged irregular availment of Cenvat credit on common input services. 3. Service tax on rent from immovable property. 4. Service tax on receipts from Fun Factory. 5. Service tax on parking fee income. Issue-Wise Detailed Analysis: 1. Service Tax on Share of Revenue from Joint Commercial Activities: The Tribunal addressed whether the appellant's share of revenue from joint commercial activities, such as the Food Court, was liable for service tax. The Tribunal referred to its previous order dated 18.03.2019, which settled this issue in favor of the appellant, concluding that the revenue from such activities was not subject to service tax. The Tribunal emphasized that the relationship between the appellant and other parties was on a principal-to-principal basis, with no provision of service to any person, thus falling outside the purview of service tax. 2. Demand under Rule 6(3)(i) for Alleged Irregular Availment of Cenvat Credit on Common Input Services: The Tribunal examined the demand of ?87,67,255/- under Rule 6(3)(i) for alleged irregular availment of Cenvat credit on common input services used for both taxable and exempt services. The appellant contended that they maintained separate accounts for input services used for exempt and taxable services and did not avail Cenvat credit on input services used for exempt services. The Tribunal noted that the adjudicating authority did not consider this plea holistically and remanded the issue for reconsideration, directing the authority to follow the principles of natural justice. 3. Service Tax on Rent from Immovable Property: The Tribunal reviewed the demand for service tax on rent from immovable property. The appellant argued that the amount of ?49,82,795/- represented municipal taxes, which are deductible from the gross rent as per Notification No. 29/2012-ST dated 20.06.2012. The Tribunal agreed with the appellant and set aside the demand of ?6,15,873/-. 4. Service Tax on Receipts from Fun Factory: The Tribunal addressed the demand for service tax on receipts from the Fun Factory. The appellant argued that these receipts were for entertainment activities subject to state entertainment tax and not service tax. The Tribunal referred to its previous decision dated 01.01.2019, which held that such receipts were not taxable under service tax, and thus, the demand was set aside. 5. Service Tax on Parking Fee Income: The Tribunal considered the demand for service tax on parking fee income. The appellant demonstrated that they had already paid ?22,17,764/- against the demand of ?12,62,642/-. The Tribunal acknowledged that the admitted tax paid was more than the assessed tax and held that no further service tax was due. Penalties: The Tribunal found that the issues were interpretational and there was no case of suppression, fraud, etc. Therefore, penalties imposed under Section 76 and Rule 15(1) of Cenvat Credit Rules were set aside. Conclusion: The appeal was allowed in favor of the appellant, with the issue relating to the reversal of Cenvat credit under Rule 6(3) remitted to the adjudicating authority for re-adjudication, following the principles of natural justice.
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