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2024 (3) TMI 639 - AT - Service TaxLevy of Service Tax - Business Support Service - amount collected by the appellant on account of electricity and water charges from the tenants being initially paid by them to the Technopark - time limitation - HELD THAT - The charges on account of electricity, water etc. is required to be paid by the tenants / lessee in addition to the lease rent to designated agencies / Technopark. Therefore, the Revenue s allegation that they have provided Business Support Service to the lessee / tenants, in our view, cannot be sustained. The issue of eligibility to service tax of these reimbursable expenses viz. water charges and electricity charges is no more res integra and covered by the judgment of this Tribunal in the case of M/S ICC REALITY (INDIA) PVT LTD OTHERS VERSUS COMMISSIONER OF CENTRAL EXCISE 2013 (12) TMI 854 - CESTAT MUMBAI and Kiran Gems Pvt. Ltd. Vs. CCE ST, Surat 2018 (11) TMI 1388 - CESTAT AHMEDABAD , where it was held that the said facility charges are not leviable to service tax. Extended period of Limitation - HELD THAT - It is found that the appellant was paying service tax under the category of Renting of Immovable Property Service and were filing ST-3 Returns periodically with the Department. Hence, suppression of facts, willful misstatement with intent to evade tax etc. cannot be fastened upon the appellant alleging non-payment of service tax. Accordingly, invocation of extended period in confirming the demand on the facility charges, when the same is reflected in the Lease Deed is not sustainable. Following the aforesaid settled principles on the subject, the electricity and water charges collected by the appellant from the tenants cannot be leviable to service tax under Business Support Service . Consequently, the impugned order is set aside - appeal allowed.
Issues involved:
The issues involved in the judgment are the classification of services provided by the appellant, the applicability of service tax on charges for electricity and water, and the validity of the demand raised by the Revenue. Classification of services provided by the appellant: The appellant was engaged in providing various taxable services including 'Renting of immovable property', 'Management, Maintenance or Repair', and 'Information Technology Software Services'. The dispute arose when the Revenue alleged that the appellant had provided infrastructural facilities to the units in their building, leading to a demand for service tax under the category of 'Business Support Service'. The appellant contended that they were only providing 'Renting of Immovable Property Service' and had discharged appropriate service tax liability on the rent received from tenants. They argued that the charges for electricity and water were reimbursable expenses and should not be considered as part of the taxable value. The Tribunal analyzed the lease deed and held that the charges for electricity and water, paid by the tenants to designated agencies, were not liable to service tax under 'Business Support Service'. Applicability of service tax on charges for electricity and water: The key question was whether the amount collected by the appellant on account of electricity and water charges from tenants, initially paid by them to Technopark, should be subject to service tax under 'Business Support Service'. The Tribunal examined the lease deed and found that the charges for power, water, and utility services were separately payable by the tenants to designated agencies. It was concluded that these charges were not part of the taxable value for service tax purposes, as they were reimbursable expenses incurred by the tenants, as per the terms of the lease deed. Validity of the demand raised by the Revenue: The appellant argued that the demand invoking the extended period of limitation was unsustainable as they had been filing ST-3 Returns periodically and paying appropriate tax. They contended that there was no suppression of facts or willful misstatement to evade tax. The Tribunal agreed with the appellant, stating that the demand for the extended period was not sustainable, especially considering that the facility charges were reflected in the Lease Deed. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief as per law. Separate Judgement: No separate judgment was delivered by the judges in this case.
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