Order Date: 11 November 2022

Facts:

• The appellant, Welspun Syntex Ltd, engaged, inter alia, in the manufacture of yarn falling under Chapter heading 54 of the Central Excise Tariff Act, 1985 and has its registered office cum factory at Silvassa, Gujarat.
• During the period under dispute, the appellant entered into an agreement with International Syntha Fabs Pvt Ltd inter alia permitting ISFPL to use the land and plant, machinery and equipment (“PME”) at Palghar Factory on rental basis. 
• The case of the department is that such consideration is liable to Service Tax under the head of Business Support Service provided by the appellant to ISFPL.
• A show cause notice was issued which was adjudicated by the Commissioner vide Order-In-Original dated 18.04.2012 wherein, it was held that activity of renting PME is classifiable under taxable Business Support Service and confirmed the demand of service tax with effect and imposed equal penalty under Section 76 and penalty under Section 77 and 78 was also imposed. 
• Being aggrieved, the appellant filed the present appeal. 

Issue:

• Whether the activity of Infrastructural Support falls under Business Support Service?

Order:

• The Tribunal observed that restructural Support Services includes providing office along with utilities, lounge and reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security.
• However, in the present case admittedly the appellant provided the entire plant machinery and equipment to ISFPL and thereafter the appellant was not involved in day to day infrastructural support to M/s International Syntha Fabs Pvt Ltd (“ISFPL”), therefore, the activity of the appellant cannot be classified under the infrastructural support service.
• The authorities further observed that since the very activity of the appellant have been brought under the taxable net subsequently it makes clear that the said activity was not covered under any taxable activity for the earlier period.
• The appellant i.e. of renting of immovable property and supply of tangible goods cannot be classified under infrastructural support service.
• The appeal is allowed.