2021 (10) TMI 182 - AT - Service Tax

Non-imposition of penalty - Section 76 of the Finance Act, 1994 - valuation with respect to service tax payable on the service of renting of immovable property service - HELD THAT - Since the matter appears to have attained finality by virtue of common understanding between the Revenue and the assessee as reflected in the order-in-original dated 27 January 2016 for the subsequent period, we find that this matter needs to be decided accordingly. The impugned order is set aside and matter is remanded to the Original Authority with a direction to decide the matter afresh as per the order-in-original dated 27 January 2016 - appeals are disposed of by way of remand.

Summary

Issues involved:
1. Appeal against confirmation of demand
2. Appeal against non-imposition of penalty under Section 76 of the Finance Act, 1994

Analysis:
1. The first issue pertains to the appeal against the confirmation of demand. The appellant challenged an order-in-original dated 02.03.2015 passed by the Commissioner of Service Tax, Commissionerate, Delhi – I. The appellant's contention was related to the valuation for service tax payable on the service of "renting of immovable property service." The appellant's representative argued that a subsequent order-in-original dated 27 January 2016, which was accepted by both the Department and the assessee, had resolved a similar issue for the subsequent period. The appellant requested a remand to the Original Authority for re-adjudication based on the decision taken for the subsequent period. The Tribunal, without delving into the merits of the case, set aside the impugned order and remanded the matter to the Original Authority to decide in line with the order-in-original dated 27 January 2016.

2. The second issue involves the appeal by the Revenue against the non-imposition of penalty under Section 76 of the Finance Act, 1994. The Departmental Representative highlighted discrepancies in the service tax collection process by the appellant. It was noted that the appellant had collected service tax on the entire rent amount from tenants without deducting property tax. However, the appellant had deposited service tax after deducting property tax from the basic rent amount, which was deemed incorrect. The Departmental Representative agreed to the remand of the matter for further examination by the Commissioner. The Tribunal, considering the mutual understanding between the Revenue and the assessee as evidenced in the order-in-original dated 27 January 2016 for the subsequent period, remanded both appeals for re-adjudication without imposing a penalty under Section 76 of the Finance Act, 1994.

In conclusion, the Tribunal disposed of both appeals by remanding the matters to the Original Authority for fresh adjudication in accordance with the decision taken for the subsequent period.