Patna Municipal Corporation Vs Commissioner of Central Excise and Service Tax (CESTAT Kolkata)
CESTAT Kolkata held that payment received towards Licensing Fee from mobile towers cannot be considered as ‘rent’ to fall within the definition of ‘renting of immovable property’. Accordingly, service tax demand to that extent set aside.
Facts- The present appeal has been filed by M/s. Patna Municipal Corporation against the Order-in-Original dated 06.06.2014 wherein the demand of Service Tax of Rs.1,50,37,382/- (inclusive of cesses) has been confirmed against them, along with interest, and a penalty of Rs.1,50,37,382/- has been imposed under Section 78 of the Finance Act, 1994. Further penalties under Section 77(1)(a) and 77(1)(c) of the said Act have also been imposed on the appellant, besides levy of late fee u/s. 70 of the Finance Act, 1994 read with Rule 7(c) of the Service Tax Rules, 1994. The demand of Service Tax has been confirmed in the impugned order under the category of “renting of immovable property” service.
Conclusion- Held that this demand pertains to the Licensing Fee from mobile towers received during the impugned period. We find that these are in the nature of granting permission to the companies to erect and maintain their mobile towers. Such payments for acquiring the permission cannot be considered as ‘rent’ to fall within the definition of ‘renting of immovable property’ service as defined under Section 65(105)(zzzz) of the Finance Act, 1994.
