Case Law Details
Nagar Parishad Vs Commissioner of Central Excise & C.G.ST (CESTAT Delhi)
Introduction: The recent order by the CESTAT Delhi on the case of M/s. Nagar Parishad, Chittorgarh, engaged in ‘Renting of Immovable Property Services,’ sheds light on the intricacies of service tax liabilities. The department alleged non-payment of service tax, leading to a show cause notice and subsequent penalties. This article provides an in-depth analysis of the CESTAT Delhi verdict, examining the legal arguments, penalties imposed, and the overall implications.
Detailed Analysis:
1. Background and Allegations: Nagar Parishad faced scrutiny for not paying service tax on charges collected under various heads related to ‘Renting of Immovable Property.’ The department proposed recovery of Rs.64,16,499, inclusive of interest and penalties, through a show cause notice.
2. Appellant’s Position: The appellant, despite being a local body under Article 243Q of the Constitution, argued that its duties fall under the negative list (Section 66D of the Finance Act). It asserted that income generated serves as a compensatory mechanism for constitutional powers under Article 243W and Schedule XII of the Constitution.
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