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2019 (9) TMI 667 - AT - Service TaxRenting of immovable property service - period August, 8/2008 to June, 6/2012 - eligibility for abatement of 40% in terms of notification no.26/2012 - service tax on letting out plant/machinery and fixtures to M/s. Mahindra Holidays & Resorts India Ltd. - Supply of tangible goods service - extended period of limitation - penalty u/s 77 and 78 of FA. HELD THAT:- The facts are akin to the ruling in the case of M/S JAI MAHAL HOTELS PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2014 (7) TMI 540 - CESTAT NEW DELHI], wherein it has been held that on true and fair construction of the provisions of Exclusionary Clause under Explanation I to Section 65(105) (zzzz) and in particular, sub-clause (d) thereof, it was held that renting of building used for the purpose of accommodation including hotels, meaning thereby renting of a building for a hotel is covered by the Exclusionary Clause and does not amount to an immovable property, falling within the ambit of taxable service. Accordingly, it is held that for the part of the disputed period August, 2008 to 30.06.2012, the appellant is not liable to service tax. For the period from 1.7.2012, the appellants have admittedly deposited the service tax and has not disputed their liability, subject to abatement. The appellant, as provided in Notification No.26/2012-ST, is entitled to abatement of 40% and is liable for service tax only on the balance receipt of 60% with respect to the lease rent of the hotel. Supply of Tangible goods service - demand of service tax - HELD THAT:- The amount received per annum is not wholly for supply of tangible goods, as the plant and machinery, which are embedded to the earth and the fixtures and fittings, which cannot be removed without cannibalising them, and their removal may destruct, is not classifiable as goods, as the same are immovable - the appellant shall not be liable to service tax under the category of SOTG on the goods which are present in the hotel premises, which are immovable in nature - this issue is remanded to the Adjudicating Authority for a re-determination. Penalties - HELD THAT:- The issue is wholly interpretational in nature. Further, the transaction is duly recorded in the books of accounts maintained in the ordinary course of business and thus, there is no contumacious conduct on the part of the appellant - Penalty u/s 77 and 78 set aside. Appeal allowed in part.
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