2024 (5) TMI 127 - AT - Service Tax

Non-payment of service tax - Renting of Immovable Property services - Management, Maintenance and Repair services - Business Auxiliary Services. Levy of service tax - Renting of Immovable Property services - whether the demand of service tax cannot be sustained for the reason that the premises has been let out by appellant for conduct of guest rooms/accommodation? - HELD THAT - The lease deed clearly shows that the premises is to be exclusively used for guest rooms and connected facilities like kitchen, dining room, parking spaces only. The demand of service tax cannot sustain when the premises is rented out for the purpose of accommodation and related activities. It is therefore held that the demand cannot sustain and requires to be set aside - demand set aside. Levy of service tax - Business Auxiliary Services - nature of activity - sale or service - transfer of percentage of holding to joint venture partner - HELD THAT - The transaction is nothing but sale of shares and there is no situation of providing services to M/s. Ascott (Mauritius) .The Tribunal in the appellant's own case M/S. RATTHA HOLDING CO. PVT. LTD. VERSUS COMMISSIONER OF CENTRAL SERVICE TAX, CHENNAI 2018 (9) TMI 1722 - CESTAT CHENNAI had considered the very same issue and held that the demand cannot sustain as there is no provision of services - the demand under Business Auxiliary Services requires to be set aside. Levy of penalty - appellant has paid the service tax along with interest before passing the adjudication order - Management, Maintenance and Repair services - HELD THAT - Taking note of the submission made by the Ld. Counsel for the appellant that the amount of service tax under this category along with interest has been paid before passing of the adjudication order, the penalty imposed in this regard is set aside. The impugned order is modified to the extent of setting aside the demand, interest and penalties imposed under Renting of Immovable Property and Business Auxiliary Services as discussed above. The demand and interest under Management, Maintenance and Repair Service is upheld. The penalty on this count is set aside. The appeal is partly allowed.

Summary

Issues Involved:
The issues involved in this case are:
1. Demand raised under Renting of Immovable Property Services
2. Demand raised under Business Auxiliary Services
3. Demand raised under Management, Maintenance, and Repair Services

Renting of Immovable Property Services:
The appellant, registered for providing Renting of Immovable Property services, was found to have not discharged Service Tax on rental amounts received from M/s. Siesta Hospitality Limited (SHSL) and on consideration received from M/s. Ascott (Mauritius) for selling shares. The Original Authority confirmed the demand, interest, and penalties. The appellant contended that the premises were let out for guest rooms/accommodation, falling under an exclusion from service tax as per Section 65(105)(zzzz). The Tribunal held that the demand cannot be sustained as the premises were rented out for accommodation purposes, setting aside the demand.

Business Auxiliary Services:
The appellant transferred shares to M/s. Ascott (Mauritius), and the Department viewed the consideration received as payment for promoting the business of M/s. Ascott (Mauritius). The Tribunal, referring to a previous case, ruled that the transaction was a sale of shares, not a provision of services, setting aside the demand under Business Auxiliary Services.

Management, Maintenance, and Repair Services:
The appellant had paid the service tax and interest before the adjudication order under this category. The demand and service tax were upheld, but the penalty was set aside considering the payment made. The impugned order was modified to set aside demands and penalties under Renting of Immovable Property and Business Auxiliary Services while upholding the demand and interest under Management, Maintenance, and Repair Services. The appeal was partly allowed with consequential reliefs.