R. Rajinikanth Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The appeals were filed against Order-in-Appeal Nos. 27 and 28/2016 dated 23.02.2016 passed by the Commissioner of Service Tax (Appeals-II), Chennai. The dispute concerned the levy of service tax on the renting of a multistorey building owned by the appellant and leased to a company for operating a hotel.
The appellant had leased the premises to M/s Vasantha Bhavan Hotels India Pvt. Ltd. for running a hotel. The department alleged that the appellant had not paid service tax on the rental income even though the property was used for business or commerce and therefore attracted service tax under the category “Renting of Immovable Property Service” under Section 65(105)(zzzz) of the Finance Act, 1994. Consequently, show cause notices and statements of demand were issued for the period from June 2007 to December 2011 and January 2012 to June 2012. The department demanded service tax of ₹46,81,870 and ₹10,02,705 respectively, along with interest and penalties.
After adjudication, the demand of service tax with interest was confirmed and penalties were imposed under Sections 77 and 78 of the Finance Act, 1994. On appeal, the Commissioner (Appeals) dismissed the appeal but set aside the penalty imposed under Section 77. The appellant then filed further appeals before the Tribunal.
