Valmet Technologies Engineering Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai Holds Mere Non-Disclosure in ST-3 Return Is Not Suppression for Extended Limitation; CESTAT Chennai Quashes Service Tax on Sub-Lease Rent as Time-Barred; Electricity Charges Are Sale of Goods, Not Taxable Service: CESTAT Chennai
The appeals arose from Order-in-Appeal No. 512/2016 (STA-I) dated 01.09.2016 passed by the Commissioner of Service Tax (Appeals-I), Chennai. The appellant, engaged in providing Consulting Engineer Service and Renting of Immovable Property Service, faced demands relating to service tax on sub-leasing of premises, inclusion of electricity charges in taxable value, and denial of CENVAT credit. Following audit, a Show Cause Notice dated 18.01.2012 covering 2007-08 to 2010-11 and a Statement of Demand dated 23.04.2012 for 2010-11 were issued. The adjudicating authority confirmed the demands, interest, and penalties, while the Commissioner (Appeals) granted partial relief by extending cum-tax benefit and allowing CENVAT credit on certain services but disallowing others.
The appellant contended that the extended period of limitation was not invocable since the disputes involved interpretation of law. Regarding service tax on rent, it argued that the premises had been sub-leased on a back-to-back basis without mark-up, the landowner had already discharged service tax, and the appellant had acted under a bona fide belief that no further tax was payable. The appellant also argued that electricity charges recovered from tenants were merely reimbursements of actual consumption and therefore not liable to service tax. It further challenged the denial of CENVAT credit and submitted that the show cause notice was vague. The Revenue maintained that sub-leasing constituted taxable renting of immovable property service, that no evidence established pure reimbursement of electricity charges, and that several input services were not integrally connected with the appellant’s output services.
