Case Law Details
Asmeeta Infratech Ltd Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
Introduction: The CESTAT Mumbai recently ruled on a case involving Asmeeta Infratech Ltd versus the Commissioner of CGST & Central Excise. The dispute revolves around the taxation of the premium received by the appellant for sub-leasing industrial lands allotted by Maharashtra Industrial Development Corporation (MIDC).
Detailed Analysis: During the period from 2014-15 to 2017-18, Asmeeta Infratech sub-leased industrial lands and recorded the consideration under “Sale of property/rights” in its books. The Service Tax Department argued that this amount should be taxable as ‘renting of immovable property.’ The appellant contended that it falls under the taxable entry of construction service, as they had already paid Service Tax on construction activities.
The department initiated show-cause proceedings, leading to an Order-in-Original confirming a Service Tax demand of Rs.8,59,41,160/- with penalties. The appellant appealed to the Tribunal.
The appellant argued that the premium received is akin to ‘Salami’ and not rent. They referenced judgments in similar cases to support their claim. The Revenue insisted that since the premium was received periodically, it should be considered as rent under the category of ‘renting of immovable property.’
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