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2024 (3) TMI 1281 - CESTAT BANGALORELevy of service tax - Life Insurance Service - premium collected by the appellant for providing life insurance service to its employees - Renting of Immovable Property Service or not - amount received towards renting of immovable property - HELD THAT:- Undisputedly, the appellant is a department of Karnataka State Government and not an insurance company and in pursuance to the Karnataka Government Servant’s (Compulsory Life Insurance) Rules, 1958 under the welfare scheme applicable to all Government employees irrespective of their status, collected contribution of 6.5% of mean pay as monthly premium towards the policy. The Service Tax Department proposed to levy service tax on the premium so collected by the appellant. On the said issue, this Tribunal in appellant own case, considering the Circular dt. 18/12/2006 issued by the Board, held that the amount of premium collected in rendering life insurance service is in the nature of sovereign function and not leviable to service tax - there are no reason not to follow the aforesaid finding of the Tribunal as no contrary decisions have been placed by the Revenue. Levy of service tax on renting of immovable property - HELD THAT:- The appellant is not contesting the same and also covered by the judgment of the Hon’ble Supreme Court in the case of KRISHI UPAJ MANDI SAMITI, NEW MANDI YARD, ALWAR VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, ALWAR [2022 (2) TMI 1113 - SUPREME COURT]. Since the issue relates to interpretation of law relating to applicability of service tax on ‘Renting of Immovable Property Service’ during the period in question and conflicting opinions on the subject expressed, levy of penalty for non-payment of service tax on the said service cannot be sustained. The demands relating to service tax on life insurance service provided to the employees are hereby dropped and service tax on renting of immovable property in both the appeals are confirmed with interest. However, penalties imposed for failure to discharge service tax on renting of immovable property are hereby dropped. The impugned orders are modified - Appeal disposed off.
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