Shree Jain Vish Oshwal Club VERSUS C.S.T.-Service Tax – Ahmedabad

SERVICE TAX Appeal No. 535 of 2012-DB

[Arising out of Order-in-Original/Appeal No STC-31-COMMR-AHD-2012 dated 28.08.2012

passed by Commissioner of Service Tax-SERVICE TAX – AHMEDABAD]

 

Shree Jain Vish Oshwal Club

VERSUS

C.S.T.-Service Tax – Ahmedabad

APPEARANCE:

Shri S. J Vyas, Advocate for the Appellant

Shri Rajesh K Agarwal, Superintendent (Authorized Representative) for the

Respondent

CORAM: HON’BLE MEMBER (JUDICIAL), MR. RAMESH NAIR

HON’BLE MEMBER (TECHNICAL), MR. RAJU

FINAL ORDER NO.A / 10046 /2023

DATE OF HEARING:08.12.2022

DATE OF DECISION: 12.01.2023

RAMESH NAIR

The brief facts of the case are that the appellant is registered trust

carrying out various social and charitable services. Appellant has been giving

its property for temporary rent to generate income to boost its charitable

activities. The appellant was registered under Mandap keeper service and

paying tax regularly. The appellant given the property on temporary basis to

M/s Gandhi Associates for providing other related service to such parties

taking hall on hire basis. As per the understanding, the total receipt was

divided on sharing basis between the appellant and the contractor. The case

of the department is that the share received by the appellant from

contractor is liable to Service Tax under Business Auxiliary Service.

Accordingly, the SCN was issued which was adjudicated by dropping part of

the demand. As regard BAS in respect of contract sharing receipts and also

did not impose penalty in respect of renting income. The Learned

Commissioner reviewed the order of the Assistant Commissioner and issued

notice for review. The Commissioner has confirmed the proposal in the

notice and modified the order in original under review and confirmed the

demand under BAS as well as under renting services income and imposed

penalties. The appellant carried the matter in appeal and this Tribunal vide

final Order dated 30.03.2012, remanded the matter. In remand proceedings,

the Learned Commissioner has again confirmed the tax and imposed penalty

under the impugned order. Being aggrieved from the said Order In Original

appellant filed the present appeal.

2.

Shri S. J Vyas, Learned Counsel appearing on behalf of the appellant

submits that the appellant received the amount not against providing any

service but as a sharing of receipt of the contractor for using their premises

for Mandap keeper services. On the receipt on sharing basis no Service Tax

can be charged as the appellant is not the service provider. He further

submits that the demand was confirmed under Business Auxiliary Service,

However, the order does not specify under which clause of the definition, the

appellant’s service falls. He submits that the non specification of the clause

is fatal to the demand and the order must be set aside with the

consequential relief. He further submits that the calculation of tax is

incorrect in as much as the appellant was not extended benefit of cum tax.

He further submits that entire demand is time barred, for the reason that

the appellant had a bona fide belief that the receipt is not towards the BAS.

He further submits that even if tax would have been paid the same was

available to their contractor for availing the Cenvat credit. Therefore, it is a

revenue neutral case, for this reason also the extended period was not

invokeable. He submits that the Learned Commissioner has erred in

appreciating the distinction between the argument for limitation, and the

argument for no liability to pay. He submits that appellant have not claimed

that due to revenue neutrality tax is not payable. However, the revenue

neutrality is a ground to establish that there is no mala fide on the part of

the appellant and consequentially the demand for extended period cannot be

confirmed as regard the renting service. He further submits that the order

confirms demand of Rs. 985/- under the category of renting of property

service. However, no income tax benefit was extended, which is legally

available to the appellant. He submits that the penalty also not imposable as

there is no mala fide on the part of the appellant. Alternatively, he submits

that simultaneous penalty under Section 76 and 78 is not permissible.

Shri Rajesh K. Agarwal, Learned Superintendent (Authorized

Representative) appearing on behalf of the revenue reiterates the findings of

the impugned order.

We have carefully considered the submission made by both the sides

and perused the records. We find that the Service Tax was demanded on the

sharing of receipt from the total receipt of the contractor. The contractor

provided the service of Mandap keeper to his client in the premises of the

appellant. Therefore, out of the Mandap keeper service as per their

understanding sharing of the appellant was given. As regard the issue that

whether the Service Tax is payable on mere sharing of consideration towards

service will not prima facie amount to provision of any service on the part of

the appellant. Therefore, in our view, the appellant had a bona fide belief in

non payment of Service Tax. The appellant also submitted that this case is

falling under the principle of revenue neutrality in as much as the tax

payment if any made by the appellant is available as the Cenvat credit to the

contractor who has used the premises of the appellant. In view of this fact,

we find that the suppression of fact and mala fide cannot be attributed

against the appellant. Accordingly, the demand is hit by limitation as

extended period could not have been invoked in the fact of the present case.

Therefore, we set aside the demand on the ground of limitation itself.

The impugned order is modified to the above extent. Appeal is allowed.

(Pronounced in the open Court on 12.01.2023 )

RAMESH NAIR

MEMBER (JUDICIAL)

(RAJU)

MEMBER (TECHNICAL)