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2023 (9) TMI 813 - CESTAT CHENNAIClassification of services - renting of immovable property service - levy of interest - extended period of limitation - penalty - HELD THAT:- The matter involved legal interpretation, which was litigated and even the tenant of the appellants had challenged the same before the Hon’ble Kerala High Court. It is a matter of record that the said litigation is pending even as on date before the Hon’ble Constitutional Bench of the Hon’ble Apex Court in the case of MINERAL AREA DEVELOPMENT AUTHORITY ETC. VERSUS M/S STEEL AUTHORITY OF INDIA & ORS [2011 (3) TMI 1554 - SUPREME COURT]. Levy of interest - HELD THAT:- The same is mandatory in nature, but however, the same has not been quantified by the adjudicating authority. In view of the facts and circumstances of the case, it is held that any interest liability payable for the normal period alone could be demanded / adjusted. Extended period of limitation - HELD THAT:- The matter involved legal interpretation, which was litigated and even the tenant of the appellants had challenged the same before the Hon’ble Kerala High Court. It is a matter of record that the said litigation is pending even as on date before the Hon’ble Constitutional Bench of the Hon’ble Apex Court in the case of MINERAL AREA DEVELOPMENT AUTHORITY ETC. VERSUS M/S STEEL AUTHORITY OF INDIA & ORS [2011 (3) TMI 1554 - SUPREME COURT]. Penalty - HELD THAT:- The suppression or fraud within the meaning of Section 78 cannot be attributed to the appellants for levying penalty under Section 78. Therefore, the penalty under Section 78 cannot sustain and to this extent, the impugned order stands set aside. Moreover, the plea that the demand that survives, as proposed in the Show Cause Notice, was only the penalty since the entire tax demand stood appropriated in the Order-in-Original, is agreed upon. Thus, the demand of interest under Section 75 of the Finance Act, 1994 is concerned, is held to be payable for the normal period alone - imposition of penalty under Section 78 ibid. stands set aside and the appeals to this extent are allowed - invocation of extended period of limitation is not in order. Appeal disposed off.
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