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TMI Blog2024 (3) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Tax, Bangalore. Appeal No. Impugned order period Tax demanded Interest Penalty ST/21459/2014 OIO No.23/2013-14 dt. 21/01/2014 2009-10 Rs.54,62,436/- Rs.7661/- u/s 75 u/s 77(2) u/s 78 ST/20084/2015 OIO No.14/2014-15 dt. 02/09/2014 2006-07 to 2009-10 Rs.4,66,84,019/- Rs.2,56,47,134/- Rs.28,743/- u/s 75 Rs.200/- per day during failure to pay tax. u/s 76 u/s 77(2) u/s 78 2. Briefly stated the facts of the case are that the appellant, a department of Karnataka Government provided life insurance service as defined under Section 65(49) of the Finance Act, 1994 to their employees during the relevant period i.e. October 2005 to March 2008 and April 2009 to March 2010. Alleging that the appellant had provided taxable servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same; also there were conflicting views prevailing at the relevant time on applicability of service tax on 'Renting of Immovable Property Service'. 3.2. As far as levy of service tax on life insurance service provided by the appellant, a department of the Karnataka State Government, it is submitted that the said service squarely falls under the category of discharging of sovereign functions under Karnataka Government Servant's (Compulsory Life Insurance) Rules, 1958. Considering the service rendered by the appellant in furtherance of sovereign functions, this Tribunal in their own case for the earlier period referring to Board's Circular, allowed their appeal by setting aside the demand on the life insurance service rendered to their emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tribunal observed as under:- 4. Heard both sides and perused the records of the case. We find that the appellants are undertaking the activity which is a mandatory and statutory function. We find that Hon'ble High Court of Kerala while disposing the Writ Petition No. 15892/2008 observed, in respect of Kerala Govt. activity in similar manner, that the activity being perused by the petitioner in providing life insurance coverage to the employees of the State Govt. is part of its statutory obligations. We also find that CBEC vide Circular No. 89/7/2006-ST dated 18.12.2006 (issued from F.No. 255/1/2006- CX-4) held at Para 2 that: "the issue has been examined. The Board is of the view that the activities performed by the sovereign/public a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the Hon'ble Supreme Court in the case of Krishi Upaj Mandi Samiti (supra). 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. 9. In the result, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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