Order Date – 10 August 2023

Parties: M/s. Brookefields Estates Private Limited Vs Commissioner of Central Excise and Service Tax

Facts –

• The Appellant, M/s. Brookefields Estates Private Limited, is registered as a provider of taxable services under the category of renting of immovable property service [‘RIPS’] and sale of space for advertisement.
• The appellant filed a refund claim of Service Tax on the parking charges as the appellant realized that the same is not covered in the definition of RIPS.
• A Show Cause Notice dated 11.02.2013 was issued proposing, inter alia, to reject the refund on the ground that the area where the parking space provided was not excluded from the definition of immovable property for the purposes of service under RIPS as claimed by the appellant.

Issue – 

• Whether definition of immovable property did include the parking area or not and rejection of refund is in order?

Order – 

• The Tribunal observed that Clause (iv) of Explanation 1 excludes, inter alia, “land” used for educational, sports, circus, entertainment and parking purposes. From a reading of the provisions, it is seen that, for the purposes of sub-clause (zzzz) of Section 65 (105), “immovable property” does not include land used for parking purposes.
• While clauses (a) and (b) under Explanation 1 make a reference to ‘vacant land’, clause (c) refers only to ‘land’. The purpose for the use of land is also mentioned as educational, sports, circus, entertainment and parking. Therefore, the word “parking” takes colour from the preceding words educational, sports, circus, entertainment. These activities in the normal course are of a nature that would normally be carried out in buildings to be put up either as a temporary or a permanent structure on land. It is perhaps for this reason that exclusion clause (c) uses the term ‘land’ instead of the term ‘vacant land’ as used in exclusion clauses (a) and (b).
• Hence it was held that a building or its part put up on land and which is used for car parking will get the benefit of the exclusion from levy of Service Tax under Section 65(105)(zzzz) ibid., as it stood then. Consequently, the rejection of the refund claim is held to be not in order.
• Hence, the impugned order is set aside and the appeal is allowed.