2019 (6) TMI 200 - AT - Service Tax

Whether the service tax paid under the head of Renting of immovable property can be considered as payment of service tax under Port Service on the same service? - Imposition of penalty. HELD THAT - In view of Circular dated 20.11.2012 even if the service tax was paid under renting of immovable property service which is otherwise a port service, the separate demand once again under port service cannot be made, therefore, the service tax paid for an amount of ₹ 43,60,638/- under renting of immovable property service may be considered as payment of service tax against port service - The department is free to make their internal adjustment in the account, for that purpose, the appellant cannot be made suffered with charge of non payment of service tax. Penalty - HELD THAT - The appellant have paid entire service tax along with interest. This is also fact that the appellant is Government of India enterprise, therefore, malafide intention to evade the payment of duty cannot be charged against the appellant. Appeal allowed in part.

Summary

Issues Involved:
Whether service tax paid under "Renting of immovable property" can be considered as payment under "Port Service" and if the penalty imposed by the lower authority is legal.

Analysis:

Issue 1: Classification of Service Tax Payment
The main issue in this case was whether the service tax paid under the category of "Renting of immovable property" could be considered as payment for "Port Service." The appellant argued that although the tax was paid under the wrong category, it should still be considered as payment, citing Circular No. 165-16/2012-ST dated 20.11.2012. The Circular clarified that service-wise sub-codes were for statistical purposes only, and all taxable services fell under a single account head post-2012. The Tribunal agreed with the appellant, stating that the payment made under renting of immovable property service could be considered as payment against port service. The department was allowed to make internal adjustments without penalizing the appellant for non-payment of service tax.

Issue 2: Penalty Imposition
The appellant, a Government of India undertaking, had paid the entire service tax along with interest. The Tribunal noted that there was no malicious intent to evade tax on the part of the appellant. Considering the appellant's compliance with the tax liability and its status as a government enterprise, the Tribunal found that the penalty imposed by the lower authority was unjustified. Therefore, the penalty was deemed wrongly imposed, and the impugned order was modified accordingly. The appeal was allowed in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the service tax paid under "Renting of immovable property" could be considered as payment for "Port Service." The penalty imposed was deemed unjustified due to the appellant's full payment of tax liability and its government status. The impugned order was modified, and the appeal was allowed.