- (1.) The Commissioner of Service Tax, Noida has filed this appeal against the order of the Customs, Excise & Service Tax Appellate Tribunal Principal Bench, New Delhi dated 28.08.2014 passed in Appeal No. ST/59067/2013 and Appeal No. ST/3256/2012. The department is aggrieved by the part of the judgment, wherein it has been held that the letting out of vacant land by way of lease/license, for construction of buildings or temporary structure for use at a later stage in furtherance of business and commerce, is a taxable service only from 01.07.2010 and not from any date prior to it.
(2.) The facts in short leading to this appeal are as follows: The assessee is a statutory body constituted under the U.P. Industrial Development Act, 1976. It has been discharging statutory functions while monitoring and carrying on the development of the areas within their territorial jurisdiction. The assessee was registered for the purpose of the payment of service tax on renting of immovable properties, services and sale of space for advertisement since 01.06.2007. It has been making payment of service tax on the rent received from constructed immovable properties rented out by it for business or commerce. However, the assessee did not made payment of service tax on the rent which it had received in the matter of allotment of plots of vacant land to various persons on lease for industrial and commercial purposes. With effect from 1st June, 2007, Section-65(105) (zzzz) was introduced in Finance Act, 1994. The section provides for service tax to be levied on service provided to a person by any other person of renting of immovable property or any other service in relation of such renting for use in course of, or for furtherance of business or commerce. Explanation-I to Section-65(105(zzzz) defines immovable property and it provides,- ******************** (zzzz) to any person, by any other person in relation to renting of immovable property for use in the course or furtherance of business or commerce. Explanation 1.-- For the purposes of this sub-clause, "immovable property" includes-- (i) building and part of a building, and the land appurtenant thereto; (ii) land incidental to the use of such building or part of a building; (iii) the common or shared areas and facilities relating thereto; and (iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate, but does not include-- "a) Vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes; b) Vacant land whether or not having facilities clearly incidental to the use of such vacant land; c) Land used for educational, sports, circus, entertainment and parking purposes; and d) Land used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities."
(3.) However, w.e.f. 01.07.2010, clause (V) was added to the definition of immovable property and it now covers vacant land given on lease or license for construction of a building or temporary structure at a later stage, to be used for furtherance of business or commerce. A notification was issued by the Research Unit of Central Board of Excise & Customs (Department of Revenue) dated 26.02.2010 whereunder it was clarified that suitable amendment in the definition of taxable service relating to renting of immovable property is being made so as to provide that tax would be charged on rent of a vacant land if there is an agreement or contract between the lessor and the lessee that construction on such land is to be undertaken for furtherance of business or commerce during the tenure of the lease.;