2018 (11) TMI 977 - AT - Service Tax

Renting of immovable property service - appellants were getting vacant land on lease of 90 years for industrial purpose and while letting the land they used to collect some lump-sum amount - demand of service tax of ₹ 84,22,72,200/- - Held that - The vacant land was given as industrial plots for the purpose of industrial units by State Government Industrial Development Corporation for lease of more than 30 years and that the above stated service tax was confirmed on one time upfront amount, in the form of lump-sum amount and therefore, the benefit of provision of Section 104 ibid is admissible to the appellant - demand alongwith interest and penalty set aside - appeal allowed. Service Tax on rent collected on vacant land/plot - period from 01.04.2010 to 31.03.2012 - Held that - The consideration received by the appellant in respect of said service for the period from 01.07.2010 to 31.03.2012 was admissible for benefit of cum duty value - the service tax payable by the appellant on renting of vacant land needs to be recalculated - matter on remand. Service Tax on renting of infrastructural facilities - extended period of limitation - Held that - The issue needs to be examined on the basis of facts and provisions of law. Further, the cum duty benefit also need to be extended to the appellant - the levy was charged w.e.f. 01.06.2007 though the notification was issued on 22.06.2010. Therefore, there cannot be any malafide intention for evasion of duty from 01.06.2007 to 22.06.2010. Therefore, extended period of limitation for the period from 01.06.2007 to 22.06.2010 is not applicable in the present case - matter remanded back to the Original Authority with a direction to recalculate service tax leviable for the period from 23.06.2010 to 31.03.2012 by taking into consideration the provision under Section (zzzz) - matter on remand. Business Auxiliary Service - Demand of service tax on Centage charges - Held that - It is appropriate to remand this matter to the Original authority with direction to examine whether the work undertaken for supervision of construction by the appellant is in respect of such work which is wholly funded by Central or State Government and if the said construction work is wholly sponsored by Central or State Government then the transaction is within Government and no service tax is leviable - matter on remand. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Demand of service tax on lump-sum amount received for letting vacant land.
2. Service tax on rent collected on vacant land/plot.
3. Service tax on renting of infrastructural facilities.
4. Demand of service tax on Centage charges.

Analysis:

Issue (a) - Demand of service tax on lump-sum amount received for letting vacant land:
- The appellant collected lump-sum amounts for letting vacant land for industrial purposes.
- Service tax was confirmed on the lump-sum amount collected.
- Appellant claimed benefit under Section 104 of Finance Act, 1994, which exempts one-time upfront amounts collected by State Government Industrial Development Corporation for industrial plots leased for over 30 years.
- Tribunal found that the appellant met the requirements of Section 104 and set aside the demand of service tax and penalty.

Issue (b) - Service tax on rent collected on vacant land/plot:
- Service tax demand was confirmed on rent collected on vacant land allotted as industrial plots.
- Appellant argued that due to litigation and retrospective amendments, extended limitation period was not applicable.
- Tribunal held that extended limitation applied for part of the period and remanded the matter to recalculate service tax without imposing penalty after a certain date.

Issue (c) - Service tax on renting of infrastructural facilities:
- Service tax was confirmed on renting various immovable properties.
- Appellant argued that certain properties were excluded from the levy based on the law.
- Tribunal remanded the matter to recalculate service tax, extending cum duty benefit and not imposing penalty for a specific period.

Issue (d) - Demand of service tax on Centage charges:
- Service tax was confirmed on Centage charges received for supervision over construction work.
- Appellant contended that the activity was a service to self as it involved supervision of work funded by the State Government.
- Tribunal remanded the matter to determine if the construction work was wholly sponsored by the Government to decide on the levy of service tax.

Conclusion:
- The appeal was allowed on issue (a), while issues (b), (c), and (d) were remanded to the Original authority for further examination and calculation of service tax without imposing penalties beyond specific dates.