By TIOL News Service

MUMBAI, FEB 13, 2019: ON the allegation that the appellant had received consideration for rendering 'Renting of immovable property service' to M/s HDFC Bank Ltd. and M/s ISTS Infotech Solutions Pvt Ltd., a demand of service tax of Rs.11.40 lakhs was confirmed along with interest thereon and imposition of penalties u/s 77, 78 of FA, 1994. Demand was also made in the SCN in respect of the notional interest on deposit but the same was dropped by the Commissioner(A) while upholding the rest of the demand made in r/o Renting of Immovable Property service.

The appellant is before the CESTAT and submits that they had claimed before the lower authorities that they are not the owners of the property but this plea was disregarded . They had also pleaded for extension of the threshold exemption, which too was brushed aside.

The Bench considered the submissions and observed thus-

"4. It is surprising that, despite such fundamental issues that have a bearing on the taxability being raised, the impugned order did not consider these to be of relevance. The ownership of the property, disputed by the appellant on the basis of certain documents and averred as being in the possession of certain other individuals, cannot but be critical in determining the provider of the service. We are unable to give a finding on the claim of the appellant as the nature of the relationship among the bank to whom amounts were owed, the appellant and the individuals stated to be the owners is not pellucid. Had the impugned order examined this aspect, a different picture may well have emerged."

Opining that it would be appropriate for the submissions to be considered by the original authority in a fresh proceeding, the impugned order was set aside and the matter was remanded to the original authority.

(See 2019-TIOL-471-CESTAT-MUM)