2024 (7) TMI 1000 - AT - Service Tax

Exemption from service tax - services by way of motor vehicle parking facility to general public - applicability of Sl No 24 of N/N. 25/2012-ST dated 01.07.2012 - HELD THAT - The agreement between the appellant and its contractor is in nature of license to provide parking facilities to general public on behalf of the Appellant i.e. Railway at the specified locations. Contractor is not extended any tenancy rights over the land and hence the said agreement cannot be said to be lease agreement for the land to be used for providing the parking facilities. The leasing of land for providing parking facilities is as such excluded from the Sl No 24 of the N/N. 25/2012-ST. From perusal of the affidavit filed by some Senior officer, it is quite evident that across the North Central Zone, the service tax was not collected by the railway authorities in respect of similar facilities provided any where. It also appears that no demand were also made, in any other jursidiction by the concerned revenue authorities, thereby extending the benefit of exemption under N/N. 25/2012-ST in respect of same services. There are no merits in the impugned order - appeal allowed.

Summary

Issues:
1. Admissibility of exemption under Sl No 24 of Notification No 25/2012-ST dated 01.07.2012.

Analysis:

1. Admissibility of exemption under Sl No 24 of Notification No 25/2012-ST dated 01.07.2012:
The case involved an appeal against an order regarding the demand of service tax on the rent received for providing parking space. The appellant, a Divisional Commercial Manager, North Central Railway, Agra Cantt, Agra, had leased land space to various contractors for parking facilities without paying service tax since July 1, 2012. The revenue authorities issued a show cause notice for non-payment of service tax amounting to Rs 41,32,804. The Assistant Commissioner confirmed the demand, interest, and imposed penalties. The appellant appealed, arguing for exemption under Sl No 24 of Notification No 25/2012-ST. The appellate tribunal analyzed the nature of the agreement between the appellant and the contractors to determine if the services qualified for exemption. It was found that the agreements were in the nature of a license to provide parking facilities, not lease agreements, as the contractors did not have tenancy rights over the land. The tribunal also considered the practice of Indian Railways across the North Central Zone and found that service tax was not collected for similar facilities, extending the benefit of exemption. Consequently, the tribunal allowed the appeal, pronouncing the judgment on July 16, 2024.

This detailed analysis showcases how the tribunal carefully examined the legal provisions, agreements, and industry practices to arrive at a just decision regarding the admissibility of exemption under the relevant notification.