2024 (3) TMI 1105 - AT - Service Tax

Non-payment of service tax - Business Support Service - Renting of Immovable Property Service - Sale of space and Time for Advertisement Service - invocation of Extended period of Limitation - penalty - HELD THAT - SCN has already been issued to the appellant on the same issue of implementation of Private Owned Buss Scheme, 2001 and a demand has already been raised under the category of 'Business Auxiliary Service' . Thus, the department is well aware of the activities of acquiring buses by the appellant from private operators for carrying passengers. Now, Notice has been again issued for the same activity under various categories of taxable service such as Business Support Service, Renting on immovable properties and providing time space for Advertisement service, by invoking the extended period. It is observed that the appellant has been filing returns regularly and the activities of appellant is well within the knowledge of the department. Accordingly, the department at this stage cannot claim wilful suppression of fact intending evade payment of service tax on the part of the appellant and raise the demand again by invoking extended period, as held by the Hon'ble Apex Court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP 2006 (4) TMI 127 - SUPREME COURT . Accordingly, the impugned Order is not sustainable on the grounds of limitation. Business Support Service - HELD THAT - The appellant corporation has acquired the passenger vehicles having road worthiness to meet their requirement for the efficient, adequate and economic passenger transport services, in public interest, The appellant, being a statutory Corporation, has no authority to permit other persons to run their vehicles on their own, on payment of some amount to the Corporation. From the plain reading of the definition of Sec.65(104c) of the Finance Act, 1994, it is observed that the activity of providing parking and receipt of entry fee is not covered under the clauses mentioned under the definition of Business Support Service. Accordingly, the activity undertaken by the appellant cannot be considered as 'Business Support Services' promoting the business of the private transport operators. Hence, the demand confirmed in the impugned order under the category of 'Business Support Services' is not sustainable. Renting of Immovable Property service - HELD THAT - The appellant has rented out immovable property for a consideration. In their submissions, the appellant contended that they are not a commercial concern. They are a non-profit making statutory body. They have provided the spaces to stall owners at various places for the benefit of the passengers to arrange their necessity during the journey. Whatever, amount collected by them cannot be considered as 'rent' and used the same has been used towards providing amenities for the passengers in the public interest. Hence, the amount received towards rentals or lease/license fees cannot be considered as 'consideration' received for taxable services - the appellant is liable to pay service tax under the category of 'Renting of Immovable property service' - there is no suppression of fact involved in this case. Accordingly, the demand, if any, under this category of service is restricted to normal period of limitation only. Time Space for Advertisement Services - HELD THAT - The appellant is not an advertisement agency. Further, we observe that 'Sale of Space and time for advertisement' has been brought under the ambit of service tax net only w.e.f. 01.05.2006. In the present case, the demand under this category has been raised for the period 2007-08 to 2011-12. As per the table mentioned in para 16.8 of the Show Cause Notice, we observe that the entire demand is confined to the period 2007-08 to 2009-10. There was no receipt under this category during the financial years 2010-11 and 2011-12. Accordingly, the entire demand under this category is barred by limitation. Hence, no demand confirmed in the impugned order survives under this category. Penalty - HELD THAT - There is no evidence of wilful suppression of fact intending evasion of payment of service tax in this case. Accordingly, the penalty imposed on the appellant is not sustainable and hence the same is set aside. Appeal disposed off.

Summary

Issues Involved: Limitation, Business Support Service, Renting of Immovable Property Service, Time & Space for Advertisement Services, Penalty.

Limitation: The appellant contended that the entire demand confirmed in the impugned order is barred by limitation. The Show Cause Notice was issued beyond one year from the due date of filing Half Yearly Returns. The department was well aware of the appellant's activities and had already raised demands under the category of 'Business Auxiliary Service'. The Tribunal observed that the department cannot claim wilful suppression of facts to evade service tax and invoke the extended period. Accordingly, the impugned order is not sustainable on the grounds of limitation.

Business Support Service: The demand of service tax of Rs.6,24,01,668/- was confirmed under 'Business Support Service'. The adjudicating authority held that the appellant provided infrastructural support services to private bus owners. However, the Tribunal observed that the appellant, being a statutory corporation, provided passenger vehicles for public transport and did not promote the business of private operators. The activity does not fall under the definition of 'Business Support Service' u/s 65(104c) of the Finance Act, 1994. Thus, the demand under this category is not sustainable.

Renting of Immovable Property Service: The demand of Rs.48,15,642/- was confirmed under 'Renting of Immovable Property Service'. The appellant argued that they are a non-profit statutory body providing spaces for passenger amenities, not for commercial purposes. The Tribunal disagreed, noting that properties were rented out for commercial purposes, including leasing to Gold Cinema. Hence, the appellant is liable to pay service tax under this category, but only within the normal period of limitation.

Time & Space for Advertisement Services: The demand of Rs.3,48,870/- was confirmed under 'Time & Space for Advertisement Services'. The Tribunal observed that the appellant is not an advertisement agency and that 'Sale of Space and Time for Advertisement' was taxable only from 01.05.2006. The demand pertains to 2007-08 to 2009-10, and is barred by limitation. Thus, the demand under this category is not sustainable.

Penalty: The Tribunal found no evidence of wilful suppression of facts intending to evade service tax. Therefore, the penalty imposed on the appellant is not sustainable and is set aside.

Order:

(i) The demands confirmed by invoking the extended period are not sustainable.

(ii) The demand under 'Business Support Service' is not sustainable.

(iii) The appellant is liable to pay service tax under 'Renting of Immovable Property Service' for the normal period of limitation.

(iv) The demand under 'Time & Space for Advertisement Services' is not sustainable.

(v) No penalty is imposable on the appellant.

(vi) The appeal is disposed of on these terms.

(Order pronounced in the open court on 22.03.2024)