2018 (2) TMI 733 - AT - Service Tax

Levy of service tax - Renting of Immoveable Property - Mandeep Keeper - Advertisement - Supply of Tangible Goods - demand on the deposit - Held that - As regard demand on the deposit, the adjudicating authority has not verified relevant fact - matter remanded to verify the facts. Land rent and bazaar land rent - Held that - no evidence is on record to show that on what account the land rent and bazaar land rent is collected - therefore the Commissioner needs to verify this aspect. Slaughter house fees Held that - as per the Schedule Twelfth of Article 243W, Regulation of Slaughter houses is the sovereign function of the Municipal Corporation. Therefore the fees collected towards the Regulation of Slaughter houses, the demand of Service Tax is hereby set aside. Advertisement - Held that - It is observed from the receipt of the Municipal Corporation i.e. appellant that the amount towards so called advertisement was collected as Jahirat Kar (Advertisement Tax) - the advertisement tax being statutory tax levy by the Municipal Corporation should not be liable to service tax. Penalty - Held that - appellant is a Government Municipal Corporation and not an individual. It cannot be imagined that the Government itself involved in suppression of fact with intent to evade service tax. Being non-existence of malafide intention no penalty can be imposed. Appeal allowed in part - part matter on remand.

Summary

Issues:
Service tax demand on various services provided by a Government Municipal Corporation, including Renting of Immoveable Property, Mandeep Keeper, Advertisement, and Supply of Tangible Goods.

Analysis:
The appellant, a Government Municipal Corporation, was subjected to service tax demands on different services provided to the public. The demands included Renting of Immoveable Property, Mandeep Keeper, Advertisement, and Supply of Tangible Goods. The appellant contested the demand related to the deposit received against the renting of immoveable property, arguing that it was an advance deposit and not consideration for services, citing relevant tribunal judgments. The appellant also argued that certain fees, such as Land Rent and Bazaar Land Rent, were statutory and exempt from service tax based on the sovereign function of the government body. The appellant further contended that fees collected for services related to the Regulation of Slaughter houses, as well as advertisement tax, should not be subject to service tax. Additionally, the appellant emphasized that as a Government Municipal Corporation, there was no malafide intention to evade service tax, seeking relief from penalties based on previous judgments.

The Revenue reiterated the findings of the impugned order and highlighted the lack of documentary evidence regarding the deposit and the need for verification of certain aspects related to Land Rent and Bazaar Land Rent.

Upon careful consideration, the Tribunal upheld the demand for Building Rent, Mandap Keeper, and Supply of tangible goods. Regarding the deposit, the Tribunal noted that if it was an advance deposit towards renting immovable property, not part of the rent, it should not be subject to service tax. The Tribunal directed the adjudicating authority to verify the nature of the deposit further. Concerning Land Rent and Bazaar Land Rent, the Tribunal emphasized the need for verification based on previous decisions. The Tribunal set aside the service tax demand on Slaughter house fees, considering it a sovereign function. The demand related to advertisement tax was also set aside, as it was deemed a statutory levy. Lastly, the Tribunal ruled out penalties against the appellant, given its status as a Government Municipal Corporation and the absence of malafide intention to evade service tax.

In conclusion, the appeal was partly allowed, and the matter was disposed of accordingly.