2018 (9) TMI 34 - AT - Service Tax

Classification of Services - Business Support Services or Supply of Tangible Goods Service? - right to use of studio/office and other equipment - demand of Service Tax with Interest and penalty - extended period of limitation - Held that - An identical situation was considered by the Tribunal in the case of Bajaj Hindustan Limited vs. Commissioner of Central Excise, Lucknow 2018 (5) TMI 552 - CESTAT ALLAHABAD and it was held that the explanation under the definition of business support services refers to circumstance wherein infrastructure stands provided along with office and other common utility to a person conducting his business from that place. Activity of renting of land along with renting of plant and machinery fell under the category of renting of immovable property and supply of tangible goods and activity is not covered under the definition of support services of business or commerce . Admittedly in the present case, office/studio along with equipment stands hired by the customer at a fix annual rent. Once the premises have been handed over to the customer, it is the obligation of the customer to maintain the said premises and to get all the infrastructure like a telephone line or the electricity, etc., on their own - the appellant had not provided any Business Support Services but the activity amounted to falling under the category of Supply of Tangible Goods , which were not taxable during the period prior to 16.05.2008. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Tax liability on taxable services provided by the appellant to M/s Zee Entertainment Enterprises Limited.
2. Interpretation of the nature of services provided by the appellant - "Business Support Services" or "Supply of Tangible Goods."
3. Applicability of tax liability based on the period of service provision.

Analysis:
1. The judgment addresses the tax liability issue concerning taxable services provided by the appellant to M/s Zee Entertainment Enterprises Limited. The appellant was found to have provided taxable services falling under the category of "Supports Services of Business or Commerce," leading to a demand confirmation of a specific amount along with interest and penalty. The period in question was from 01.05.2006 to 31.03.2008.

2. The crux of the matter revolves around the interpretation of the services provided by the appellant. The appellant contended that the services offered were related to the hiring of studio/office and equipment, which did not align with the definition of "Business Support Services." They argued that the services should be categorized as "Supply of Tangible Goods," which were not taxable before 16.05.2008. The lower authorities did not accept this argument, leading to the demand confirmation and penalties.

3. The appellate tribunal analyzed the situation in detail, referring to previous judgments to support their decision. They cited cases where activities like renting of land and machinery were considered under "renting of immovable property" and "supply of tangible goods," not falling under "support services of business or commerce." The tribunal found that the appellant's services of hiring out the studio/office and equipment were akin to "Supply of Tangible Goods," and as the period of service provision was before 16.05.2008, no tax liability arose.

4. Ultimately, the tribunal ruled in favor of the appellant, setting aside the impugned order and providing consequential relief due to the absence of tax liability for the services provided before 16.05.2008. The judgment was pronounced on 20/07/2018 by Mrs. Archana Wadhwa, Member (Judicial), and Mr. Anil G. Shakkarwar, Member (Technical).