M/s. Tuticorin Port Trust Versus Commissioner of GST & Central Excise Tirunelveli
Service Tax
2018 (10) TMI 477 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 26-9-2018
ST/40359/2015 – 42476/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
For the Appellant : Shri R. Sai Prasanth, Advocate
For the Respondent : Shri K. Veerabhadra Reddy, ADC (AR)
ORDER
PER BENCH
Brief facts are that on investigation it was revealed that the appellant leased out lands to M/s. NLC Tamilnadu Power Ltd. for setting up for coal based Thermal Power Plant at Tuticorin and collected lease rent for the entire period in advance. They had not paid service tax for leasing the said vacant land. Department was of the view that the vacant land being an immovable property would fall within the ambit of renting of immovable property service. Show cause notice was issued proposing to demand service tax on the rent collected along wi
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ffect from 01.07.2010.
This issue stands already settled in favour of the appellant by Hon'ble Allahabad High Court in Commissioner of Service Tax, Noida Vs. Greater Noida Development Authority 2015 (40) STR 46 (All.) wherein it was held that in view of exclusion of vacant land from ambit of immovable property prior to 01.07.2010, it cannot be said to be merely clarificatory and retrospective from 01.06.2007. Further reliance is placed on decision of Hon'ble Delhi Tribunal in New Okhla Industrial Development Authority Vs. CCE, Customs & S.T. Noida 2015 (39) STR 443 (Tri.-Del.) wherein he Hon'ble Tribunal has also held that renting of vacant land is not taxable prior to amendment with effect from 01.07.2010.
3. The ld. AR Shri K. Veerabhadra Reddy supported the findings in the impugned order.
4. After hearing both sides we find that the issue is no longer res integra. The Tribunal in the case of New Okhla Industrial Development Authority (supra) has discussed the issue and held as un
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incidental to the use of such building or part of a building;
(iii) the common or shared areas and facilities relating thereto; and
(iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate, but does not include –
(a) vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes;
(b) vacant land, whether or not having facilities clearly incidental to the use of such vacant land;
(c) land used for educational, sports, circus, entertainment and parking purposes; and
(d) building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities.
Explanation 2. – For the purposes of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for residential or any
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zzzz).
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15. On the above analysis, renting of vacant land by way of lease or licence (irrespective of the duration or tenure), for construction of a building or a temporary structure for use at a later stage in furtherance of business or commerce is a taxable service only from 1-7-2010, and not so, earlier to this date.
Further, the Hon'ble High Court of Allahabad in the case of Greater Noida Development Authority (supra) had also held that there is no liability to pay service tax prior to 1.7.2010 for renting of vacant land. Following the decisions, we are of the considered opinion that the demand cannot sustain. The impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Operative portion o
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