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Whether Central Railway is not liable to service tax for providing renting of immovable property service because ‘person’ not defined u/ s. 65 of the FA, 1994?
Facts:
The appellant, Central Railways is engaged in providing taxable services of renting of immovable property services, sale of space or time for advertisement services and mandap keepers services. The Appellant contended that it was not liable to pay service tax as ‘person’ was not defined in the Finance Act, 1994 and the fact that it was introduced vide amendment in the Finance Act, 2012 in sub-clause (37) of section 65B of the Act had prospective effect only and meant that the Appellant was not liable for period earlier to 1st July 2012.
Held:
The Hon’ble CESTAT relied on the ratio laid down by the Hon’ble Supreme Court in Sea Customs Act AIR 1963 SC 1760 and held that Government is liable to pay indirect taxes for taxable activities undertaken by the Government and even though the decision was in relation to excise and customs duty it will equally apply to service tax. The Hon’ble CESTAT further held that as per section 38 of the Finance Act, 1994, all the rules made there under are also placed before the Parliament, and as the Rule 2(d) being part of the Service Tax Rules, 1994 has been approved by the Parliament the ‘person’ as specified therein will include Government also. Further, in regard to the invocation of extended period of time it held that evasion of tax or suppression can not be presumed.
