Case Law Details
Cords Cable Industries Limited Vs Commissioner, Central Excise (CESTAT Delhi)
The appellant company is engaged in the manufacture of instrumentation/power cable and during the period of dispute from July 2012 to August 2014, the appellant paid an amount of Rs. 2,73,01,852/- towards rent to Naveen Sawhney and D.K. Prashar for the premises let out by them to the appellant. The premises were used by the appellant for its Registered Office/Corporate Office. Naveen Sawhney and D.K. Prashar also happen to be the Directors of the appellant. In the invoices raised by the landlords to the appellant in respect of the properties let out, service tax aggregating to Rs. 27,14,665/- was also charged and deposited as and when it fell due.
The Commissioner (Appeals) assumed that Naveen Sawhney and D.K. Prashar are providing service of renting of immovable property as Directors of the appellant, whereas they are providing the said service in their individual capacity as owners of the premises and not as Directors of the appellant.
The appellant, in such a situation, could not have been asked to pay service tax on a reverse charge mechanism. What needs to be further noticed is that service tax had been deposited on the rent received by Naveen Sawhney and D.K. Prashar from the appellant.
Thus, for all the reasons stated above, the order dated 07.05.2018 passed by the Commissioner (Appeals) cannot be sustained and is set aside.
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