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2018 (3) TMI 1002 - AT - Service TaxRenting of Immovable Property Service - non-payment of service tax - time limitation - whether the demand of service tax raised for non-payment of tax on Renting of Immovable Property Service during the period 2007-2008 is barred by limitation? - Held that - There is no dispute of the fact that by virtue of retrospective legislation viz. Sec. 77 of Finance Act,2010 service tax on Renting of Immovable Property Service has been validated to be payable from the date of its insertion in the Finance Act,1994 i.e. w.e.f. 01.06.2007. The Hon ble Calcutta High Court in the case of INFINITY INFOTECH PARKS LTD. Versus UNION OF INDIA 2014 (12) TMI 36 - CALCUTTA HIGH COURT has recently considered the issue of recovery service tax on renting of immovable property invoking the extended period of limitation, and observed that the extended period of limitation cannot be invoked for recovery of the service tax not paid during the relevant period on Renting of Immovable Property Service. The recovery of the service tax on Renting of Immovable Property cannot be affected invoking extended period of limitation - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the demand of service tax on Renting of Immovable Property Service for the period 2007-2008 is barred by limitation. Issue-wise Detailed Analysis: 1. Whether the demand of service tax on Renting of Immovable Property Service for the period 2007-2008 is barred by limitation: The appellant rented their premises and collected rent from June 2007 to March 2008 without discharging service tax under the category of Renting of Immovable Property Service. Upon receiving a communication from the department in March 2010, they paid service tax for the period April 2009 to March 2010. However, a Show Cause Notice (SCN) was issued on 07.01.2011 for recovery of service tax amounting to ?4,59,968/- for the period April 2008 to March 2009 with interest and penalty. The adjudicating authority confirmed the demand with interest and penalty, which was upheld by the Commissioner (Appeals). The appellant contended that there was confusion regarding the chargeability of service tax on Renting of Immovable Property Service, as evidenced by the Hon'ble Delhi High Court's judgment in Home Solution Retail India Ltd. Vs. Union of India 2009 (14) STR 433 (Del.) declaring the provision as ultra vires. They argued that the demand for the earlier period was barred by limitation and cited several judgments supporting their stance. The Revenue, on the other hand, argued that Section 77(c) of the Finance Act, 2010, mandated the recovery of service tax retrospectively from June 2007. They contended that the appellant neither obtained service tax registration nor filed ST-3 Returns, resulting in suppression of facts, justifying the invocation of the extended period of limitation. The Revenue distinguished the judgments cited by the appellant, emphasizing that in those cases, the assessees were registered with the department, unlike the present case. The Tribunal noted that the appellant was not registered with the department and disputed their liability for the period 2008-2009 on the ground that the demand was barred by limitation due to no suppression or misdeclaration. The Tribunal referred to the Hon'ble Calcutta High Court's judgment in Infinity Infotech Parks Ltd. Vs. UOI 2014 (36) STR 37 (Cal.), which held that the extended period of limitation could not be invoked for recovery of service tax not paid during the relevant period on Renting of Immovable Property Service. The Tribunal also referred to the Supreme Court's judgment in J.K. Spinning and Weaving Mills Ltd. & Anr. v. Union of India & Ors. 1987 (32) E.L.T. 234 (S.C.), which held that retrospective amendments must be subject to the provisions of Section 11A of the Central Excise Act, 1944, and the extended period of limitation could not be invoked without specific provision overriding Section 11A. In conclusion, the Tribunal held that the conditions for invoking the extended period of limitation were absent, as there was no positive, conscious, and deliberate action intended to evade tax by the appellant. The Tribunal set aside the impugned order and allowed the appeal, concluding that the recovery of service tax on Renting of Immovable Property could not be affected by invoking the extended period of limitation. Conclusion:The Tribunal allowed the appeal, setting aside the impugned order, and concluded that the demand for service tax on Renting of Immovable Property Service for the period 2007-2008 was barred by limitation. The Tribunal emphasized the absence of conditions for invoking the extended period of limitation and upheld the appellant's contention.
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