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PJ/Case Laws/2012-13/1306

Whether rent receipts from all the three co-owners of a building be clubbed for the purpose of SSI exemption?


Case:- SHRI PANKAJBHAI CHAMPAKLAL PAREKH, SHRI PARIMALBHAI CHAMPAKALAL PAREKH, SHRI SANJAYBHAI CHAMPAKLAL PAREKH Vs COMMISSIONER OF SERVICE TAX, AHMEDABAD
 
Citation:- 2012-TIOL-1572-CESTAT-AHM
 
Brief Facts:-Three individuals are co-owners of a building and have rented out the premises to a person who issues different cheques to all individuals. Revenue is considering the amounts received by all individuals collectively and by denying the benefit of SSI exemption, holding them liable to service tax on individual basis. All these three applications are filed against a common order in appeal for waiver of pre-deposit of an amount of Rs. 3,58,688/- confirmed as service tax liability, interest thereof and penalties under section 76, 77 and 78 of the Finance Act, 1994.
 
Appellant Contentions:-The Appellant submits that the appellants are co-owner of a particular building and have rented out the premises to a person. The person issues different cheques to all co-owners. He also submits that the amounts received by the individuals would be within the threshold limits of SSI exemption as granted by the Notification No. 6/2005-ST dated 01.03.2005 and amended vide Notification No. 08/2008-ST dated 01.03.2008. He also submits that the Revenue has considered the amounts received by all of the applicants as collectively but seeking to charge service tax liability individually on the persons.
 
Respondent Contentions:-The Respondent reiterates the property is jointly owned by all the persons and same is rented and hence there is service of Renting out of an Immovable Property. It is his submission that for individual purposes, and for the benefit of individual co-owners, the appellants sought the payment individually. The department is correct in assessing the service tax liability after considering the amount collectively received by the individual appellant.
 
Reasoning of Judgment:-We have considered arguments on both the sides. The issue involved in this case is regarding service tax liability on the above mentioned individuals as a provider of service under the category of Renting out of Immovable Property. We fin

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