Case Law Details
M/s. Municipal Corporation Vs. CCE (CESTAT Delhi)
On the first issue regarding the liability of the appellant to pay service tax under the category of “renting of immovable property service” , we note that the shops, which are given out on rent are used for commercial purposes. We have perused sample copies of agreements. The appellant could not place on record any exemption extended to them either due to their status or due to the purpose for which the said shops were rented out. These shops were given to a particular sections of people in terms of a Scheme announced by the Government, by itself, does not take away the tax liability. “Renting of immovable property” service is with reference to renting, leasing, licensing, or other similar arrangement of immovable property for use in course for “furtherance of business or commerce.”. The exclusion given is with reference to renting of such property by religious body or education body. We could not find any exclusion from the tax entry which will apply to the appellants. Though the appellants are created by an Act and are performing as a local Government, there is no bar in taxing their activities if the immovable property rented out by them is used in the course “for furtherance of business or commerce.” Admittedly, in the present case, the shops premises are used for business or commerce. In such situation, we find no reason for interfering with the findings of the lower authorities regarding tax liability of the appellant under the category of “renting of immovable property”
FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-
The appeal is against order dated 28.06.2013 of Commissioner of Central Excise, Raipur. The appellant is a local authority functioning under Chattisgarh Municipal Corporation Act, 1956. The present appeal relates to tax liability of the appellant under the category of “Renting of immovable property” in terms of Section 65(90a) of the Finance Act, 1994. The appellants were registered with the Department and were paying service tax under the category of “Mandap Keeper Service”. The appellant had buildings/ shops, which were given out to people for running business in terms of M ukhyamantri Swalamban Yojna and similar such schemes. The appellants contended that the considerations received for giving out these shops to the beneficiaries cannot be taxed under “renting of immovable property” service.
2. The Original Authority adjudicating the notice issued against the appellant held that the appellants are liable to service tax of Rs. 70,08,745/-. The period covered is 2007-08 to 2011-2012. Penalties were also imposed under Section 76, 77 and 78 of the Finance Act, 1994.
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