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Commissioner of Central Excise, Nasik Versus Deoram Vishrambhai Patel

2015 (9) TMI 790 - CESTAT MUMBAI

Renting of Immovable Property - Co-owners / Joint property - SSI exemption upto 10 lakhs - notification no. 6/2005-ST dated 01/03/2005 - whether the respondent and his brothers are to be treated as association of persons or other wise and service tax liability on it arises; should be confined without the benefit of the notification No. 6/2005-ST - Held that:- the ownership of the Property and providing of taxable renting of immovable Property by the four appellants in this case is in their indiv .....

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Adv ORDER Per: M.V. Ravindran This appeal is filed by the Revenue against Order-in-Appeal No. RPS/179/NSK/2013 dated 13-06-2013. 2. The facts in brief, leading to the present appeal, are that the appellants are co-owners of the property located at Patel Plaza', Near Govinda Rickshaw Stop, M G Road, Jalgaon and there is no legal partition or division amongst them. They entered into a joint agreement with M/s. Max New York Life Insurance Co Ltd, M/s HDFC Standard Life Insurance, M/s Oriental B .....

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f Section 65(105) of Finance Act, 1994, which defines taxable service as any service provided or to be provided to any person, by any other person, in relation to renting of immovable property for use in the course of furtherance of business or commerce. After recording various submissions, show cause notice was issued to the appellant. 3. Appellant contested the show cause notice on merits as well as on limitation. Adjudicating authority after following due process of law confirmed the service .....

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isions of Section 77(1) (a) and Section 77(2) of the of the Finance Act, 1994. The respondent is not in appeal against such an order. 4. Learned Departmental Representative would draw our attention to the facts of the case and findings of the adjudicating authority. It is his submission that the respondent here-in had a premise which was rented out to various banks and an amount was collected as rent. It is his submission that in order to avail ineligible exemption, respondent informed the lower .....

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ification no. 6/2005-ST dated 01/03/2005 is not applicable and is in respect of qua-service and not qua service provider . The exemption granted by the first appellate authority under this notification is incorrect. It is also his submission that the first appellate authority had set aside the penalties under Section 76 and 78 incorrectly. It is his submission that there was an intentional suppression of the facts to evade payment of Service Tax, hence penalties under both the Sections are appli .....

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ssociation of persons . 6. We have considered the submissions made by both sides and perused the records. The issue that needs to be decided in this case is whether the respondent and his brothers are to be treated as association of persons or other wise and service tax liability on it arises; should be confined (sic) without the benefit of the notification No. 6/2005-ST. 7. It is undisputed that the property which has been rented out by the respondent and his brothers is jointly owned property; .....

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g any legal basis for doing so. The appellants have contested the Order in Original mainly on the grounds that rented property belongs to four separate persons (all brothers) but the service tax has been demanded wrongly by the department from the appellants by clubbing the rent received by all the co-owners and, therefore, the demand off tax is not maintainable on this ground alone. In support they have produced a City Survey Extract as evidence regarding ownership of the rented property which .....

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liability along with interest on 14/2/2012. Thus, the ownership of the Property and providing of taxable renting of immovable Property by the four appellants in this case is in their individual capacity and, therefore, their tax liability should have been determined by considering their individual rental receipts and not collective one. From the various lease agreements made with above mentioned Commercial firms, it cannot be disputed that monthly rent was paid by the above named concerns to eac .....

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8377; 8 lakhs and 10 lakhs in the years 2007-09 and 2008-09 respectively which is below the exemption limit of eight lakhs and ten lakhs during the relevant period. The appellants were, therefore, not liable to pay service tax on the amounts received by them during these two years by virtue of Notification No. 6/2005-ST dated 01.03.2005. The appellant's case is also supported by the Tribunal's decision in the case of Dinesh K Patwa vs. CST, Ahmedabad which is referred in Para 3(ii) above .....

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n Notification 6/2005 ST dated 1/3/2005 during the period 2007-08 and 2008-09, no service tax was payable during the said period. Hence, the question of penalty under Section 76 for the said period does not arise. For the subsequent period i.e. 2009-10 & 2010-11, the appellants have already accepted their tax liability and paid Service tax along with interest on 14/2/2012. The said payment of service tax is certainly a delayed payment, but was made by the appellants on their own when they re .....

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the SCN, one statement of Shri Chandulal Vishrambhai Patel is only referred to which was recorded on 22/2/2012 which is 8 days after the appellants had paid service tax along with interest on their own. Thus, the claim of the appellant that they had paid service tax for the years 2009-10 and 2010-11 on their own initiative and there was no suppression of facts etc on their part with any intention to evade service tax cannot be denied. Considering all these facts, I agree with the appellant's .....

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