TMI Blog2024 (4) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... CE TAX, KOLHAPUR [ 2018 (2) TMI 733 - CESTAT MUMBAI] , the Tribunal held that Regulation of slaughter houses is the sovereign function of the Municipal Corporation therefore the fees collected towards the regulation of slaughter houses, the demand of Service Tax does not arise. In view of the above, the demands against the Appellant with regard to the rent markets, bus stands, vehicle stand, slaughter house and comfort station are set aside as they are the sovereign functions of the appellant and it is immaterial whether they are delivered directly or through the intermediaries. However, the Commissioner also observes that in certain cases, the appellant has collected the Service Tax and therefore, even though they are not liable to service tax, the tax collected needs to be deposited with the tax authorities. Taxability of services provided by the appellant to various telecom companies by way of permitting them to lay terrestrial and overhead communication cables in corporation property - appellant s grievance is that these amounts do not figure in their Income and Expenditure Statement along with the advanced accounts which has been the basis for arriving at the taxable value - H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rriving at the taxable value by the Revenue at the time of issuance of the notice and considering the accounting methods has rightly arrived at the taxable value based on income and expenditure statement and the advanced accounts . There are nothing wrong in the methodology adopted by the Commissioner, which is also not disputed by the appellant except for stating that he has traversed beyond the notice. Extended period of Limitation - suppression of facts or not - HELD THAT:- Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. On the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11A the burden is cast upon it to prove suppression of facts. An incorrect statement cannot be equated with a wilful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. - there is nothing on record in the impugned order to est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc; which are part of the negative list and these are the functions entrusted to the corporation under article 243W of the Constitution of India. ii. The entire methodology adopted by the audit team are based on the entries in the income and expenditure statement, balance sheet, receipt and payment statement and other ledgers which led to duplication of Payments. iii. As per the agreements with Reliance Jio, they required to deposit ₹. 2,00,000 as secretary deposit with the corporation which is refundable after 3 years. Any demand of service tax on this amount is not sustainable as there is no quid pro quo service being rendered. iv. An amount of rupees 70,00,000 and ₹1,00,00,000 is appropriated from the deposits paid by the Reliance Jio which is intended for restoration of roads and restoration of bus stand which are damaged due to trenching and laying of fibre optical cable. Since repairs maintenance and management of roads is specifically exempt from service tax this demand is to be set aside. v. The benefit of cum tax value was not given. vi. The appellants are local self-government body whose accounts are publicly audited and are available on the public domain an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an explanation under Section 66B, which states that for removal of doubts, it is hereby clarified that the references to the provisions of Section 66 in Chapter V of the Finance Act, 1994 (32 of 1994) or any other Act, for the purpose of levy and collection of Service Tax, shall be construed as references to the provisions of Section 66B. Though initially inserted, it was omitted by Finance Act, 2013 (Act 17 of 2013), dated 10-5-2013. Therefore, it is submitted that Section 66 of the Act has to be read along with Section 66B. 18. It is to be noted that though Explanation under Section 66B was omitted by Finance Act, 2013, dated 10-5-2013, it was inserted as Section 66BA. Sub-section (1) of Section states that for the purpose of levy and collection of Service Tax, any reference to Section 66 in the Finance Act, 1994 or any other Act for the time being in force, shall be construed as reference to Section 66B thereof. In terms of sub-section (2) of Section 66BA, the provision namely Section 66BA shall be deemed to have come into force on 1-7-2012. It is to be noted that on and after the introduction of Section 66B with effect from 1-6-2012, there was a diametric shift in the pattern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of vacant land, we note that the learned AR submitted that the present dispute is not with reference to any vacant land but for such land for commercial construction for renting out. After 1.7.2010, the same will be liable to tax. This has been upheld by the Tribunal in the case of Greater Noida Industrial Development Authority 87 VST 461 (T-Delhi) as affirmed by the decision of the Hon ble High Court of Allahabad 2015 87 VST 496. Therefore, the AR submits that they are liable to pay tax on renting of immovable property and vacant land which is meant for commercial purpose. Hence, requested to uphold the decision of the Commissioner. 4. Heard both sides and perused the records. With regard to the demand of Service Tax on various public amenities provided by the appellant such as market space, bus stands, vehicle stands, slaughter houses etc., the claim of the appellant is that these are the sovereign functions entrusted to them by the Kerala Municipality Act ,1994 which has been placed on record. As per the above Act, Section 243-W reads as follows: 243-W; Powers, Authority and Responsibilities of Municipalities etc- subject to the provisions to this constitution, the legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that the fees are collected through the agent or an intermediary is immaterial as long as these are civic amenities falling under Article 243W, which is not disputed. It is also submitted that the Commissioner in the case of Chalakudy Municipality has held that the services provided by the Municipality when they appoint persons to collect license fee in respect of such public amenities cannot be treated as service falling under renting of immovable property service as such activities are not in the furtherance of business or commerce considering these facts I'm inclined to hold that the services provided by the appellant such as public health and sanitation, public amenities including street lighting, parking lots, bus stops and public conventions and regulation of slaughter houses and tanneries are not taxable under the category of renting of immovable property . 4.2 In the case of Karad Nagar Parishd versus Commissioner of Central Excise and Service Tax, Kolhapur: 2018 (2) TMI 733, the Tribunal held that Regulation of slaughter houses is the sovereign function of the Municipal Corporation therefore the fees collected towards the regulation of slaughter houses, the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand is on taxable value arrears recovery pertaining to service provided prior to 1.4.2011 . The appellant claims that this amount of Rs.3,68,00,915/- includes the arrears for the year 2011-12 which is already included in the year 2012. It is also submitted that the amount received during 2011-12 is only Rs.64,56,678/- which was received during the period April 2011 to September 2011 which is beyond the period of limitation and therefore, cannot be a part of the notice. According to the appellant, the actual taxable amount is the amount received during October 2011 to March 2012 which is Rs.37,13,989/- as against Rs.3,68,00,915/-. We agree with the submission of the learned Consultant that the any arrears beyond 5 years is not sustainable but since these are factual data errors as has been explained by the Consultant, the same needs to be verified before finalisation of demand. 6. With regard to the methodology adopted by the Revenue to arrive at the taxable value, the Commissioner observed that all incomes are recognised on accrual basis and considering the provisions of the Point of Taxation Rules 2011 I find that the income and expenditure statement of the SSC along with advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciliation of their tax performance. Had the audit not under taken by department, the irregularity in tax levy would have gone unnoticed and would have continued unabated . 7.1 There is no dispute that whenever the appellant rendered services in furtherance of business or commerce, necessary Service Tax is being paid even though there are disputes regarding the taxable value. The alleged short-payments are not with any intent to evade payment of duty but on assessing the incorrect taxable value. Having already held in the previous paragraphs that the appellant is not liable to pay Service Tax for some of the services, as rightly pointed out by the appellant there is nothing on record to establish the intent to evade payment of duty. The appellant has relied on the decision of TS Motors (supra) and Southern Power Distribution (supra) wherein the Tribunal in these cases referring to the decision of the Hon ble Supreme Court in the case of Pushpam Pharmaceuticals Co. and Continental Foundation Joint Venture Holding Vs. Commissioner of Central Excise, Chandigarh where the Supreme Court had observed that the expression suppression has been used in the proviso to Section 11A of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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