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2024 (12) TMI 81 - AT - Service TaxRecovery of service tax - Non-payment of service tax on amount of royalty collected over and above the bid amount during the period April 2009 to March 2012 - nonpayment of service tax on the rent amount received in lieu of renting the hotel premise which is used solely for running the hotel for the period April 2010 to March 2014 - non-payment of service tax on notional interest on security deposit collected by the appellant as per lease dated 01.01.2010. Non-payment of service tax on amount of royalty collected over and above the bid amount during the April 2009 to March 2012 - HELD THAT - The said issue has been dealt with by this Tribunal in the case of MATESHWARI INDRANI CONTRACTORS PVT LTD VERSUS C.C.E. S.T. -JAIPUR 2018 (6) TMI 665 - CESTAT NEW DELHI where it was held that ' Service Tax under the category of Business Auxiliary Service would become liable only if the service is rendered in relation to the business of the recipient. In the present case, the appellant, as a contractor, has engaged in collecting statutory levies on behalf of the Government department (CTD)/ statutory authority (NHAI) neither of whom are engaged in business. Secondly, we are of the view that the levy of Service Tax cannot be sustained on the Commission retained by the appellant.' As issue has already been decided by this Tribunal holding that on activity of collection of amount over and above the bid amount, no service tax can be levied on such an activity under the category of Business Auxiliary Service. As appellant was engaged in collecting statutory levies on behalf of the government department which is not engaged in a business. Therefore, following the said decision, the demand against the appellant is not sustainable for non-payment of service tax on an amount of royalty collected over and above the bid amount. In view of this, the demand of Rs.21,87,591/- is dropped. Demand of service tax for the period July 2012 to March 2014 confirmed against the appellant for non-payment of service tax on rent amount received in lieu of renting the hotel premises which is used solely for running a hotel - HELD THAT - It is found that if appellant is to be given cum tax benefit along with the exemption under Notification No. 6/2005-ST dated 01.03.2005 which is superseded by Notification No. 33/2012-ST dated 20.06.2012, thereafter only the small amount is payable by the appellant of Rs.98,933/-. Rest of the amount, the appellant has already paid along with interest and after the conclusion of argument at this stage, the learned counsel for the appellant conceded that that demand of Rs.98,933/-. Therefore, the demand of Rs.98,933/- confirmed apart from the amount of service tax of Rs.8,14,094/- had already been paid by the appellant. Therefore, appellant is liable to pay an amount of Rs.98,933/-, the same shall be claimed along with the interest. No penalty is imposable on the appellant. Appeal disposed off.
Issues:
Demand of service tax on royalty collected over bid amount, demand of service tax on rent amount received for hotel premises, applicability of cum-tax benefit, invocation of extended period of limitation. Analysis: The appellant appealed against an order confirming a demand of service tax of Rs.32,25,831 under Section 78 of the Finance Act, 1994, along with penalties and interest. The appellant participated in bids by the Mines & Geology Department for collecting royalty. The appellant did not pay service tax on the profit collected above bid amount, believing no service was provided. The appellant also rented out a hotel premise without paying service tax on rent before July 2012. A show cause notice proposed service tax demands for various periods. The Tribunal dropped the demand for service tax on renting immovable property before July 2012 and notional interest. However, the demand for service tax on excess royalty and rent was confirmed, totaling Rs.10,38,240. Regarding the demand for service tax on royalty, the appellant cited a previous Tribunal decision that no service tax is leviable on collecting amounts above bid amount for government departments not engaged in business. The Tribunal found the demand unsustainable and dropped the demand of Rs.21,87,591. For the demand on rent from July 2012 to March 2014, the appellant claimed cum-tax benefit and exemption under a notification. The Tribunal confirmed a demand of Rs.98,933, as the appellant had already paid Rs.8,14,094. No penalty was imposed on the appellant. The appeal was disposed of accordingly.
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