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TMI Blog2017 (4) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... more taxable service from one or more premises, the exemption under notification No. 06/2005-ST dated 01.03.2005 shall not apply if the aggregate of all such services is more than ₹ 10,00,000/-. The MRA and MMR services provided by appellant also being taxable services, the appellant cannot get the exemption of threshold limit of ₹ 10 lakhs. The renting of immovable property service came into force w.e.f. 01.06.2007 in terms of N/N. 23/2007-ST dated 22.05.2007. Thus the levy on renting of property against the previous levy on services relating to renting of property prior to 01.07.2010 was created retrospectively and therefore, the demand for the extended period is highly irregular - interest cannot be demanded for the demands made on the basis of retrospective amendments. Appeal allowed - decided partly in favor of assessee. - Appeal No. ST/30697/2016 - A/30458/2017 - Dated:- 2-3-2017 - Ms. Sulekha Beevi, C.S., Member (Judicial) Sh. Y. Sreenivasa Reddy, Advocate for the Appellant Sh. Nagraj Naik, Deputy Commissioner (AR) for the Respondent ORDER [ Order Per: Sulekha Beevi, C. S. ] 1. The above appeal is filed against the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x on renting of immovable property service and therefore, is liable to pay service tax under the said services w.e.f. 01.06.2007. A Show Cause Notice dated 18.04.2013 was issued raising the above allegations. After due process of law, the original authority confirmed demand of ₹ 14,90,865/- under Manpower Recruitment Agency Service (MRAS); ₹ 12,74,528/- under Management Maintenance and Repair Services (MMRS) and ₹ 1,56,592/- on Renting of Immovable Property Service(RIPS). The said demands were confirmed along with interest and also imposed penalty of ₹ 29,21,985/- under Section 78 of Finance Act, 1994 and penalty of ₹ 10,000/- under Section 77 of Finance Act, 1994 besides imposed late fee of ₹ 1,40,000/- imposed under Section 70 of Finance Act, 1994. In appeal, the Commissioner (Appeals) upheld the same. Hence this appeal. 3. On behalf of the appellant, the Ld. Counsel Sh. Y. Sreenivasa Reddy submitted that the appellant had not discharged service tax in respect of MRA and MMRS for the reason that the main contractor who had issued the work orders had taken up the responsibilities of discharging the service tax liability and had discharged the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt brought forth to the definition of RIPS has made the said services taxable w.e.f. 01.06.2007 retrospectively. A further amendment was made by introducing Sub-section (2) to Section 80 of Finance Act, 1994, by which the assesses were given a chance to clear the arrears of service tax on RIPS pursuant to the retrospective amendment. The appellant has not paid the service tax and interest on RIPS as provided in sub-Section (2) of Section 80 of Finance Act, 1994. That therefore, the demand raised invoking extend period is legal and proper. 6. I have heard the submissions made before me. In regard to the demand of service tax on MRA and MMRS the contention put forward by the appellant is that, main contractor has discharged the service tax liability, and therefore, being sub-contractor the appellant is absolved from the liability to pay service tax for these services. The appellant has given a detailed reply to show cause notice putting forward this plea and the same is discussed in the Order-in-Original which is reproduced as under: 7. We further submit that we have executed the subject works on behalf of main contractors. The work orders issued by the main contractor also ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.03.2005 shall not apply if the aggregate of all such services is more than ₹ 10,00,000/-. The MRA and MMR services provided by appellant also being taxable services, the appellant cannot get the exemption of threshold limit of ₹ 10 lakhs. 9. The second contention put forward is with regard to demand on RIPS. Prior there was much debate on the issue whether Renting of Immovable Property Service per se is taxable or not. The ground raised by appellant is that lower authorities erred in demanding service tax on the rental amounts received by the appellants for the period prior to July 2010 i.e., for the extended period invoking proviso to Section 73(1) of the Act in the case wherein levy was declared unconstitutional and the definition of the service is amended with retrospective effect. The service Renting of Immovable Property was introduced in the budget 2007 and the definition on its introduction reads as follows: (90a) renting of immovable property includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce but does not include- (i) renting of immovable p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Pvt. Ltd., Vs. CCE, Mumbai [2006 (1) STR 73 (SC), the Honorable Supreme Court of India held that the liability to pay interest would only arise on default and is really in the nature of quasi punishment and such liability although created retrospectively could not entail the punishment of payment of interest with retrospective effect. (b) It is clearly held by the Honorable Supreme Court in the case of CCE, Hyderabad Vs. Associated Cement Companies Ltd., [2005 (180) ELT 3(SC)] while upholding the retrospective levy, that time to make payment commences from the date of judgment and no interest and penalty is applicable. 10. The show cause notice is issued after 01.07.2010 invoking the extended period alleging suppression of facts. The appellant had not discharged the service tax under RIPS only because the issue was contentious during the relevant period and also because the amendment made the same taxable retrospectively from 01.06.2007 onward. It is correct that the said issue whether RIPS is taxable or not was contentious during the relevant period and the litigation is still pending before the Honorable Apex Court. However, Sub-section (2) of Section 80 introduced gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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