The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the levy of the service tax on “renting of immovable property services” was constitutionally valid.
Commissioner, Namakkal Municipality, the appellant assessee appealed against the order passed by the Commissioner of Central Excise (Appeals) for rejecting the appeal filed by the assessee for challenging the interest demanded and penalty imposed by the adjudicating authority.
D. Jaishankar, the counsel for the assessee contended that merely because there was renting of immovable property by itself was not sufficient to attract levy of Service Tax and it only when the service was provided by “any other person” i.e. by a person other than the owner, such service was liable to Service Tax.
It was further submitted that the penalty imposed for the non-payment of service tax was not as per the law and was liable to be deleted.
Ananda Lakshmi Ganeshram, the counsel for the revenue relied on the decisions of lower authorities and contended that the assessee’s prayer in their appeal was for waiving the interest demanded and the penalties imposed and that the assessee was not disputing the levy of service tax as confirmed in the impugned order.
It was also submitted that the assessee was liable to pay both interest and penalty imposed by the adjudicating authority.
The bench observed that the payment of the retrospectively amended tax liability within a specified time, in such circumstances, the assessee was not entitled to pay interestc if the monies are paid within the due date and that they would be liable to pay interest only after the due date.
The two-member panel comprising P. Dinesha (Judicial) and M. Ajit Kumar (Technical) quashed the interest and penalties confirmed in the impugned order while allowing the appeal filed by the assessee.
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