2019 (2) TMI 680 – CESTAT CHENNAI – TMI – Valuation – renting of immovable property – case of appellant is that the authorities have not taken into consideration the property tax paid by the appellant while arriving at the total taxable value – Held that:- Indeed, if taxes are paid by the appellant, the same has to be considered while arriving at the total taxable value – They have raised contention about the advance deposit received from tenants. The appellant has submitted that they are willing to produce necessary documents – it is proper to remand the matter to the adjudicating authority for requantifying the tax liability after giving the appellant the benefit of the property tax paid by them as well as the rent received in advance from tenants if any – matter on remand.
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Penalty – Held that:- Undisputedly, during the relevant period, the issue whether Renting of Immovable Property Service is subject to levy of service tax was highly contentious. There were litigations pendi
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e was issued proposing to demand service tax along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand of ₹ 1,97,75,319/- along with interest and also imposed penalty of ₹ 19,77,532/- under section 76(1) of Finance Act, 1994. Aggrieved, the appellant is now before the Tribunal. 3. On behalf of the appellant, ld. counsel Ms. Radhika Chandrasekar appeared and argued the matter. She submitted that the appellant is engaged in the business of publishing magazines and has commercial premises at different locations in India where their offices are situated and parts of which are leased out for commercial purposes. They have registered under the Service Tax Department and was paying service tax under the head Renting of Immovable Property Service . Initially, the appellant was under bonafide belief that the said services is not subject to levy of service tax and had filed W.P. No. 24586 to 24587 of 2010 challenging th
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d in advance from tenants had been included in the total taxable value. If such amount is deducted, the tax liability would be reduced. She therefore prayed that the matter may be remanded to the adjudicating authority for taking into consideration the payment of property tax as well as the rent received in advance from tenants from the total taxable value. 4. The ld. counsel pleaded for waiver of penalty. She submitted that during the disputed period, the issue whether Renting of Immovable Property is subject to levy of service tax was highly contentious. There were litigations pending before various High Courts. In the case of Home Solutions Retails India Ltd. Vs. Union of India – 2009 (158) ELT 722, the Hon ble Delhi High Court had held that levy cannot sustain. Later by amendment brought forth to sub-section (2) to section 80 of Finance Act, wherein there was entire waiver of penalty if the tax demand on renting of immovable property is paid within six months (prescribed time). The
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to be considered while arriving at the total taxable value. They have raised contention about the advance deposit received from tenants. The appellant has submitted that they are willing to produce necessary documents. Therefore, we find that it is proper to remand the matter to the adjudicating authority for requantifying the tax liability after giving the appellant the benefit of the property tax paid by them as well as the rent received in advance from tenants if any. So Ordered. 8. The ld. counsel has argued to set aside the penalties. Undisputedly, during the relevant period, the issue whether Renting of Immovable Property Service is subject to levy of service tax was highly contentious. There were litigations pending before various High Courts. An amendment was brought forth in 2010 having retrospective effect for the levy. Sub-section (2) to Section 80 provided that there would be waiver of penalty if the assessee paid the service tax along with interest within a prescribed time
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