The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad, has partly allowed an appeal filed by a Lucknow-based mall operator against a service tax demand exceeding Rs. 1.42 crore, remanding the core issue related to renting of immovable property services back to the adjudicating authority for fresh examination after the Supreme Court’s final verdict in a connected case.
The two-member bench of Angad Prasad (Judicial Member) and Sanjiv Srivastava (Technical Member) has observed that demand on miscellaneous income (claimed by the appellant to be from sale of scrap and interest) — the Tribunal agreed that since no documentary proof was produced, the demand along with interest and penalty under Section 78 would stand, subject to re-quantification by the adjudicating authority. Recovery of ₹12.37 lakh in inadmissible CENVAT credit — upheld in full, as the company failed to provide invoices or records substantiating legitimate credit.
The case arose from an investigation initiated after tax authorities received information that the company — the legal owner of Riverside Mall, Vipin Khand, Gomti Nagar — was providing taxable services such as management, maintenance or repair, cleaning, and renting of immovable property, but had allegedly failed to discharge service tax fully on rent received from its tenants, including major brands like Inox Leisure Ltd., Future Group (Big Bazaar), Barbeque Nation, Mainland China, Barista Coffee, and others.
Officers of the Service Tax department visited the mall premises in January 2013, and subsequent scrutiny of financial records, ST-3 returns, and balance sheets for FY 2007-08 to 2011-12 led to the issuance of a show cause notice (SCN) dated October 23, 2013 demanding ₹1.84 crore in service tax, interest, and penalties for alleged short payment and irregular CENVAT credit utilisation.
The Commissioner confirmed a service tax demand of ₹1,42,43,376, along with interest under Section 75 of the Finance Act, 1994, penalty of equal amount under Section 78 for suppression of facts and minor penalties under Sections 77(1)(b) and 70(1).
He also appropriated ₹35.44 lakh already deposited during the investigation.
In its appeal before the Tribunal, the company contended that much of the service tax demand related to rent from tenants who were members of the Retailers Association of India (RAI). The Supreme Court, in Retailers Association of India v. Union of India (2012), had permitted such tenants to pay only 50% of arrears in instalments and furnish surety for the balance pending final adjudication of the issue on taxability of renting of immovable property.
The Tribunal observed that the question of taxability of renting of immovable property services involving RAI members is sub judice before the Supreme Court. It, therefore, remanded the issue to the adjudicating authority to be decided after the Apex Court’s final ruling.
However, the bench upheld other portions of the Commissioner’s order, including:
The Tribunal ordered remand of the renting-of-immovable-property service tax demand to the original authority, to be decided after the Supreme Court’s final judgment in the RAI case. Upholding of service tax, interest, and penalties on miscellaneous income, with quantification to be redone.
The CESTAT confirmed Rs. 12.37 lakh CENVAT credit demand with applicable interest and penalty.
Case Details
Case Title: M/s Amrit Bottlers Pvt. Ltd. versus Commissioner of Central Excise & CGST, Lucknow
Case No.: Service Tax Appeal No.51692 of 2015
Date: 16/10/2025
Counsel For Appellant: None
Counsel For Respondent: Chitra Srivastava
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