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2022 (1) TMI 158 - AT - Service TaxLevy of service tax - Ground/Market Rent - Marriage Hall Rent - Stall/Ground Rent - Built Own Transfer charges (BOT) e) Hospital - Blood Bank Rent - Pay and Park Fees - Bazar auction/Bazar fees - Rusta Nuksan Bharpai (ROW) - applicability of time limitation - penalties - HELD THAT - The observations made by the Commissioner, are agreed upon, to the effect that just because the services under consideration have been provided Municipal Authority, the same cannot be said to be a service covered under Article 243 read with Schedule 12 of Constitution of India. Hence the arguments advanced by the appellant counsel to that effect cannot be sustained, more so over when they themselves have admitted there liability to pay service tax in respect of services under category of BOT, Mandap Renting of Space to Blood Bank - the submissions of the appellant to effect that the value of tax able services under these category needs to be redetermined after taking into account the relevant and admissible deductions are agreed upon. Renting of Stall - HELD THAT - To the extent the space is provided to the poor for the purpose of street vending and street hawking, the submission made by the appellant is agreed upon, but the same cannot be true in case of the shops and stalls rented out. Extended period of limitation - Section 73 of the Finance Act, 1994 - HELD THAT - Commissioner has found the justification that being statutory authority cannot be subjected to penalty. Without stating Section 80 of Finance Act, 1994 he for these reasons has refrained from imposing penalties on the appellant - it is clear that extending benefit under Section 80 cannot be cited as reason for not invoking extended period of limitation under Section 73 - the invocation of extended period is justified. Matter needs to be reconsidered by the adjudicating authority in respect of the demands made under the head Pay and Park , Bazar auction/ Bazar Fees and Rasta Nuksan Bharpai/ ROW - In respect demands made under categories, Ground/ market Rent. Marriage Hall, Bhade Patti (BOT), Stall Ground Rent, Hospital and Blood bank rent, while the leviability of the service tax has been upheld as per our observations in para 4.8 and 4.9, but the quantum of the value of taxable service and service tax leviable needs to be redetermined - Extended period of limitation as held by the Commissioner is invokable - Penalties imposed should be waived off by invoking section 80 of the Finance Act, 1994. Appeal allowed in part and part matter on remand.
Issues Involved:
1. Demand for Service Tax under various heads. 2. Invocation of the extended period for demand as per Section 73 of the Finance Act, 1994. 3. Classification of services under the Finance Act, 1994. 4. Applicability of exemptions and negative list. 5. Imposition of interest and penalties under Sections 75, 76, 77, and 78 of the Finance Act, 1994. 6. Reconsideration of demands and penalties based on previous orders and legal precedents. Detailed Analysis: 1. Demand for Service Tax under Various Heads: - Ground Rent/Market Rent/Stall Rent: The appellants argued that these services fall under the Twelfth Schedule of the Constitution of India and are sovereign functions exempt from service tax. The Tribunal referred to the Hon'ble Supreme Court's decisions and CBEC circulars, which support the exemption for such services. - Marriage Hall Rent: The appellants claimed that the rent collected for community and religious activities is not liable to service tax as it is part of their constitutional mandate. The Tribunal acknowledged this argument but noted the need for re-determination of the taxable value. - Blood Bank Rent: The appellants contended that renting space to a charitable blood bank should be exempt. The Tribunal required evidence that the blood bank's activities were charitable and directed re-determination of the taxable value. - Pay and Park Fees, Bazar Auction Fees, Rasta Nuksan Bharpai (ROW): The Tribunal noted that the demand for these services was dropped in the order dated 29.05.2020, but upheld in the order dated 23.01.2018. The Tribunal directed re-examination of these demands for the earlier period. 2. Invocation of the Extended Period for Demand: - The Tribunal upheld the invocation of the extended period for demand under Section 73 of the Finance Act, 1994, as the appellants had not provided sufficient justification for their failure to pay service tax. The Tribunal noted that the appellants had obtained service tax registration and paid tax on some services, indicating awareness of their tax liabilities. 3. Classification of Services: - The Tribunal examined the classification of various services provided by the appellants under the Finance Act, 1994. It concluded that services such as renting of marriage halls, blood bank space, and BOT lease rent were taxable. However, it directed re-determination of the taxable value for these services. 4. Applicability of Exemptions and Negative List: - The Tribunal referred to the Mega Exemption Notification No. 25/2012-ST and Section 66D of the Finance Act, 1994, to determine the applicability of exemptions. It upheld the exemption for services related to street vending and hawking, but not for renting of shops and stalls. The Tribunal also noted that the exemption under Notification No. 1/2018-ST for ROW charges should be applied retrospectively. 5. Imposition of Interest and Penalties: - The Tribunal agreed with the Commissioner’s approach in the second order to waive penalties under Section 80 of the Finance Act, 1994, considering the appellants' status as a statutory body. However, it upheld the imposition of interest under Section 75. 6. Reconsideration of Demands and Penalties: - The Tribunal directed the adjudicating authority to re-examine and re-determine the demands for Pay and Park Fees, Bazar Auction Fees, and ROW charges for the earlier period, aligning with the order dated 29.05.2020. It also directed re-determination of the taxable value for services under the categories of Ground/Market Rent, Marriage Hall Rent, BOT Lease Rent, Stall Rent, and Blood Bank Rent. Conclusion: The Tribunal partially allowed the appeals, setting aside certain demands and penalties, and remanded the matters back to the original authority for re-examination and re-determination of the taxable value and service tax liability, in line with the observations made. The adjudicating authority was directed to finalize the remand proceedings within three months of receipt of the order.
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