Welspun Syntex Ltd Vs C.C.E. & S.T.-Vapi (CESTAT Ahmedabad)
CESTAT Ahmedabad held that the activities of renting of immovable property and supply of tangible goods cannot be classified under infrastructural support service and since the said services were taxable after the relevant period. Demand of service tax not sustainable for earlier period.
Facts-
The appellant entered into a conducting agreement with International Syntha Fabs Pvt Ltd (ISFPL) permitting ISFPL to use the land and plant, machinery and equipment (PME) at Palghar Factory on rental basis. The consideration received towards renting of land and PME by the appellant from ISFPL, during the period under dispute. The case of the department is that such consideration is liable to Service Tax under the head of Business Support Service provided by the appellant to ISFPL, accordingly, a show cause notice was issued which was adjudicated by the Commissioner, wherein, it was held that activity of renting PME is classifiable under taxable Business Support Service and confirmed the demand of service tax with effect and imposed equal penalty u/s. 76 and penalty u/s. 77 and 78 was also imposed. Being aggrieved by the said Order-In-Original. Appellant filed the present appeal.
Conclusion-
Held that it is clear that the appellant have not provided any regular services to the International Syntha Fabs Pvt Ltd (“ISFPL”) whereas they have given their plant and machinery equipment, on rental basis to International Syntha Fabs Pvt Ltd (“ISFPL”) for running their production activity wherein the appellant has not involved. From the said agreement, it is clear that the activity of the appellant falls under renting of immovable property in respect of land/ plant, land fixed plant. In respect of movable machinery equipment, the activity at the best can be classified as supply of tangible goods for use. It is undisputed fact that both services became taxable after the relevant period in the present case. We further observed that since the very activity of the appellant have been brought under the taxable net subsequently it makes clear that the said activity was not covered under any taxable activity for the earlier period.
Held that it is clear that the activity of the appellant i.e. of renting of immovable property and supply of tangible goods cannot be classified under infrastructural support service. Accordingly, the impugned order is not sustainable. As regard the other issues raised by the appellant, since, we have decided the case on its merit and accordingly demand is not sustainable.
