Onkar Associates Vs Commissioner of Central Excise & Service Tax (CESTAT Chandigarh)
The appellant had rented its godowns to Punjab State Warehousing Corporation during the periods 01.06.2007 to 31.03.2010, 01.04.2010 to 30.09.2010, and 01.10.2010 to 31.03.2011. The Department alleged that the appellant had provided “Renting of Immovable Property Service” from 01.06.2007 without paying service tax. Three show cause notices were issued for different periods seeking recovery of service tax of ₹6,88,859, along with interest and penalties. The Joint Commissioner confirmed the demands through the Order-in-Original dated 05.03.2012, and the Commissioner (Appeals) dismissed the appellant’s appeal.
Before the Tribunal, the appellant contended that the demand for the period June 2007 to March 2010 was barred by limitation under Section 73 of the Finance Act. It submitted that during the relevant period there were conflicting judicial views regarding the levy of service tax on renting of immovable property. Although the service was brought under the tax net with effect from 01.06.2007 by introducing Section 65(105)(zzzz), the Delhi High Court, in Home Solution Retail India Ltd., had held that mere renting of immovable property was not a taxable service. The appellant further submitted that the Finance Act, 2010 retrospectively amended the provision with effect from 01.06.2007, making renting of immovable property taxable and neutralising the earlier judgment.
