2025-VIL-672-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Renting of immovable property service, Service tax on electricity charges, DGAC charges, Extended period of limitation, Suppression of facts - The appellant is engaged in providing 'renting of immovable property service' by leasing out space in their mall complex. The department issued a show cause notice alleging that the appellant had not paid service tax on the DG charges and DGAC charges collected from the lessees. The department contended that these charges were for providing services of backup power through DG sets and air conditioning services through HVAC plants, and were liable to service tax. The show cause notice also alleged that the appellant had suppressed the value of taxable services and contravened various provisions of the Finance Act, 1994, thereby invoking the extended period of limitation under the proviso to Section 73(1) - Whether the DG charges collected by the appellant for providing backup power through DG sets are liable to service tax - HELD - The Tribunal relied on the decisions in the cases of ICC Realty (India) Pvt. Ltd., Kiran Gems Pvt. Ltd., and Shipra Estates Ltd., which held that the electricity charges reimbursed by the tenants to the service provider are not includible in the gross value of renting of immovable property service - The appellant had generated the electricity using DG sets and supplied the same to the tenants through the existing network, which was similar to the supply of electricity by the grid - Accordingly, the DG charges collected by the appellant cannot be subjected to service tax - the appeal filed by the appellant and the revenue is dismissed - Whether the DGAC charges collected by the appellant for providing air conditioning services through HVAC plants are liable to service tax - HELD - The appellant had collected the DGAC charges as consideration for providing air conditioning services to the tenants, which were distinct from the supply of electricity - The air conditioning services provided by the appellant qualified as a taxable service under Section 65B(44) of the Finance Act, 1994, and the DGAC charges were the consideration for such services. Therefore, the Tribunal upheld the demand of service tax on the DGAC charges - Whether the extended period of limitation under the proviso to Section 73(1) can be invoked against the appellant - HELD - The Tribunal relied on the decision in the case of Trans Engineers India Pvt. Ltd., which held that the revenue authority cannot invoke the extended period of limitation when the records of the assessee were audited by the department's officers and no short-payment was found - The department had conducted an audit of the appellant's records for the overlapping period, and the present demand was based on the same records - Therefore, the extended period of limitation cannot be invoked against the appellant, and the demand should be restricted to the normal period under Section 73(1).
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