2019 (5) TMI 57 - AT - Service Tax

Renting of immovable property service - demand of service tax - Benefit of N/N. 45/2010 ST dated 27.02.2010 - HELD THAT - The appellant had a property in Chenoy Trade Centre, Parklane, and Secunderabad which they rented to M/s Global Technology Pvt. Ltd., but had not declared the rental income in their ST-3 returns and therefore there is a demand of ₹ 30,930/- along with interest confirmed by the Adjudicating Authority - Demand upheld. CENVAT Credit - duty paying documents - improper documentation - Rule 9 CCR, 2004 - HELD THAT - Appellant submits that they were not able to produce the documents before the Adjudicating Authority but they will be able to do so now. In view of the above, the demand in so far as these two amounts is concerned, needs to be remanded back to the Adjudicating Authority to examine the documentation that may be provided by the appellant and re-determine the CENVAT credit to be denied, if any. Services provided to SEZ developer - benefit of N/N. 09/2009-ST dated 03.03.2009 - Demand on the ground that Notification provided for exemption by way of refund to the SEZ unit/developer and not to the supplier themselves.- HELD THAT - Supply of services by the assessee to the SEZ developer M/s. APIIC has to be treated as export of services in view of Section 2(m) read with Section 51 of the SEZ Act, 2006. No service tax can, therefore, be levied on such supply notwithstanding the fact that Notification No. 09/2009-ST dated 03.03.2009 did not provide for exemption as the services are deemed to have been exported. Appeal disposed off.

Summary

Issues:
1. Service tax demand on erection, commissioning, and installation services.
2. Service tax demand on services provided to SEZ developer.
3. Service tax demand on renting of immovable property services.
4. CENVAT credit wrongly taken on improper documentation.

Analysis:
1. Service tax demand on erection, commissioning, and installation services:
The appellant was engaged in providing services related to transmission of electrical energy by installing and erecting transmission towers. The issue revolved around the denial of exemption under certain notifications by the Adjudicating Authority. The Tribunal found that the towers installed were meant for the transmission and distribution of electricity, making the appellant eligible for the benefit of exemption notifications. Hence, the demand on this count was set aside.

2. Service tax demand on services provided to SEZ developer:
The demand of service tax on services provided by the appellant to an SEZ developer was contested based on the applicability of exemption notifications. The Tribunal referred to legal interpretations and held that the services provided to the SEZ developer should be treated as export of services under the SEZ Act, thereby exempting them from service tax. Consequently, the demand on this count was set aside.

3. Service tax demand on renting of immovable property services:
A demand of service tax was raised on the rental income received by the appellant from a property in Secunderabad. The Adjudicating Authority confirmed the demand, stating that the rental income was not declared in the ST-3 returns. The Tribunal, after examining the records, agreed with the Adjudicating Authority and upheld the demand along with interest.

4. CENVAT credit wrongly taken on improper documentation:
The appellant had taken CENVAT credits amounting to certain sums without proper documentation, leading to demands by the Adjudicating Authority. The Tribunal decided to remand this issue back to the Adjudicating Authority for re-examination upon the appellant's assurance of providing the necessary documentation. The eligibility of CENVAT credit would be re-determined based on the evidence presented.

In conclusion, the Tribunal partially allowed the appellant's appeal by setting aside certain service tax demands while upholding others. The Revenue's appeal was rejected, and all penalties were set aside. The detailed analysis of each issue provided clarity on the legal interpretations and application of exemption notifications, resulting in the final order pronounced by the Tribunal.