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2019 (11) TMI 1604 - AT - Service TaxLevy of service tax - rent amount received by the appellant from the employees for letting out of the quarters - to be classified as rent on immovable property for use in the course or furtherance of business or commerce or not - scope of SCN - HELD THAT:- The demand of service tax was proposed on the ground that the rent as recovered by the appellant is nothing but rent on immovable property for use in the course or furtherance of business or commerce. Moreover, in the adjudication order also, the Ld. AC has not refuted the submission of the assessee that the quarters have been used for residential/dwelling purpose. Therefore, the nature of usage of quarter by the employees for residential/dwelling purpose cannot be doubted in absence of any proof to the contrary. Moreover, it is a settled legal position that the department cannot travel beyond the scope of allegations levelled in the SCN. Taxability - HELD THAT:- The issue is no longer res-integra inasmuch the Tribunal in the case of SR. ACCOUNTS OFFICER M/S. M.P. POWER GENERATING CO. PVT. LTD. VERSUS CCE, BHOPAL [2017 (4) TMI 952 - CESTAT NEW DELHI], as relied by the appellant, has already held that the rent amount received for letting out the properties to the employees for accommodation purpose is not liable to service tax since the same is clearly excluded from the definition of taxable service as was applicable during the period in dispute - The above decision has been rendered considering the law as was applicable during the period prior to introduction of Negative List service taxation regime i.e. prior to July 2012. From July 2012 onwards, in the Negative List regime, Section 66D of the Finance Act, 1994 as amended, covered entry (m) to state that services by way of renting of residential dwelling for use as residence has been kept outside the purview of levy of service tax. During the entire period in dispute, the rent amount received for letting of the immovable property for residential dwelling purpose has been excluded for service tax levy. Since the fact relating to use of the immovable property is not in dispute, the appellant is not liable to pay the demanded service tax. The decision in the case of COMMISSIONER OF C. EX., BANGALORE-III VERSUS TATA AUTO COMP SYSTEMS LTD. [2011 (4) TMI 1397 - KARNATAKA HIGH COURT] as relied by the Ld. Departmental Representative has no relevance to the instant case inasmuch as in the said case, the issue was whether or not CENVAT credit is available to the company on transportation services availed by its employees. The Tribunal in the said case held that the said transportation services were used in relation to or furtherance of business and thus credit is legally available in view of the inclusive nature of definition of ‘input service’. The impugned demand of service tax, interest and penalty cannot legally sustain and hence, the same is set aside - Appeal allowed - decided in favor of appellant.
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