2024 (2) TMI 870 - AT - Service Tax

Negative listed service or not - Levy of service tax - renting of immovable property - renting out land and shops to traders - Agricultural Produce Market Committee - scope of section 66 (D) (d) of the Finance Act, 1994 - whether section 66 (D) (d) of the Finance Act would not cover renting of shops or other building structures and would cover only renting of vacant land with or without structure? - HELD THAT - The issue now stands decided in favour of the respondent by the Supreme Court in KRISHI UPAJ MANDI SAMITI, NEW MANDI YARD, ALWAR VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, ALWAR 2022 (2) TMI 1113 - SUPREME COURT . The Supreme Court held that the activity of the Mandi Samiti in renting out space/immovable property after 01.07.2012 is included in the Negative List and, therefore, service tax cannot be levied. In view of the aforesaid decision of the Supreme Court, there is no merit in this appeal - appeal dismissed.

Summary

Issues involved:
The issue involves the appeal by the department against the order passed by the Commissioner (Appeals) setting aside the demand of service tax on the respondent for renting out space/immovable property of the Mandi Samiti to traders.

Details of the Judgment:

Issue 1: Interpretation of Tax Liability
The period involved in the appeal is from October 2013 to March 2015. The respondent, a Krishi Upaj Mandi Samiti, rented out land and shops to traders, collecting allotment fee/lease amount. The department contended that this amount constituted a taxable service of "renting of immovable property."

Issue 2: Legal Interpretation and Precedent
A show cause notice was issued proposing a demand of Rs. 66,20,222, which was confirmed by the Additional Commissioner. However, the Commissioner (Appeals) set aside the demand, citing section 66 (D) (d) of the Finance Act, 1994, and a Final Order by the Tribunal in favor of the appellant.

Issue 3: Department's Appeal
The department filed an appeal challenging the Commissioner (Appeals) order, arguing that section 66 (D) (d) of the Finance Act did not cover renting of shops or building structures, but only vacant land.

Issue 4: Supreme Court Decision
The Supreme Court's judgment in Krishi Upaj Mandi Samiti vs. Commissioner of Central Excise and Service Tax, Alwar, held that activities of Market Committees in renting out space/immovable property after 01.07.2012 are included in the Negative List, exempting them from service tax liability.

Conclusion:
Given the Supreme Court's decision and interpretation of the law, the appeal by the department was dismissed, as the activity of renting out space/immovable property by the respondent fell within the Negative List after 01.07.2012.