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2020 (9) TMI 1303 - HC - Service TaxLevy of service tax - renting of immovable property service/mandap keeper service - eligibility for Mega Exemption Notification No.25/2012 dated 20.06.2012 - time limitation - penalty - HELD THAT:- The issue is no longer res integra. The Division Bench of the Madras High Court had already decided the issue in the decision GV. MATHESWARAN VERSUS THE UNION OF INDIA AND OTHERS [2015 (3) TMI 391 - MADRAS HIGH COURT]. After upholding the validity of Section 65(105)(zzzz) of the Act, in Paragraph No.56, the Hon'ble Division Bench observed that it is open to the local body to pass on the burden to the recipient of the service. When the Division Bench of the Madras High Court has already held that the local bodies are also liable to pay service tax for rendering “renting of immovable properties” service/mandap keeper services etc., then, it is not required to go into the issue once again. Judicial discipline demands to respectfully follow these binding precedents. Whether the impugned demand are hit by limitation? - HELD THAT:- Admittedly, the petitioners did not register with the respondent department immediately. From the date of registration as an assessee, the petitioner is liable to pay service tax. If limitation is computed, the impugned demands are well within time - this issue had been specifically dealt with by the Division Bench of the High Court of Judicature of Chhattisgarh in PAWAN ENGINEERING WORKS VERSUS COMMISSIONER OF CUSTOM AND CENTRAL EXCISE & SERVICE TAX, RAIPUR [2019 (11) TMI 1206 - CHATTISGARH HIGH COURT] where it was held that non-registration of the appellant, in the given circumstances, definitely will amount to suppression of the relevant facts, which came to the notice of the Department, only later, on the basis of some intelligence gathered by the Preventive Officers of the Central Excise. This being the position, it squarely comes within the purview of 'sub-Clause (d)' under the proviso to Section 73(1) of the Finance Act, 1994 and hence it was open for the Department to have invoked the extended period of 'five years' for issuing the show cause notice. Thus, in the present case, the impugned demands are within limitation. Levy of penalty - HELD THAT:- Since the local bodies are discharging statutory obligation by way of providing public service without any profit making intent and amount so collected is eventually spent for the welfare of the public, there cannot be any malafide intention to evade payment of service tax. It is for this reason, the Tribunals throughout India have been taking a consistent stand in directing waiver of penalty. The respondent authorities are bound by the view taken by the jurisdictional Tribunal. Therefore, levying of penalty on the local body is clearly not warranted and they are accordingly set aside. Petition allowed in part.
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