2025-VIL-378-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Renting of Immovable Property, Reimbursements, Pure Agent - Appellant, as owner of ITC Centre, Kolkata, and ITC Infotech Park, Bangalore, permitted certain entities to use portions of its premises under leave and licence agreements - The licensees were required to pay the monthly licence fee, electricity charges, and maintenance charges to ITC Limited – Dept alleged that appellant had recovered service tax from the licensees but not deposited the same with the government exchequer - Whether the demand of service tax can be confirmed on a ground different from the one stated in the show cause notice – HELD - The show cause notice was issued on the allegation that appellant had recovered service tax from the licensees but not deposited the same with the government exchequer. However, the Ld. Commissioner in the impugned order had found that appellant had not collected any service tax from the licensees. After having found against the Department on the ground on which the show cause notice was issued, the Ld. Commissioner could not have confirmed the demand on any other ground. Accordingly, the demand confirmed in the impugned order was not sustainable and liable to be set aside on this ground alone - the impugned order is set aside and the appeal is allowed - Whether the amounts reimbursed by the licensees for electricity, telephone, and maintenance charges are includable in the assessable value for the purpose of levy of service tax on renting of immovable property – HELD - the appellant did not provide electricity, telephone, or maintenance services to the licensees. The payments received by ITC Limited were reimbursements of the actual costs incurred, without any mark-up. The Tribunal held that the amounts reimbursed by the licensees for electricity, telephone, and maintenance charges were not "consideration" for any service provided by ITC Limited in the course of providing renting of immovable property service. The Tribunal further held that ITC Limited acted as a "pure agent" in collecting and paying these charges to the concerned agencies. Accordingly, the Tribunal held that the reimbursements received by ITC Limited on account of electricity, telephone, and maintenance charges were not includable in the assessable value for the purpose of levy of service tax on renting of immovable property.
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