CESTAT affirmed service tax liability on upfront fees received...

CESTAT affirmed service tax liability on upfront fees received under Concession Agreements for renting immovable property services, following the Larger Bench precedent in Rajasthan State Industrial Development case. The Tribunal held that "leasing" under Section 65(90a) includes both premium and periodical rent as defined under Section 105 of Transfer of Property Act, making one-time premium amounts taxable. However, CESTAT set aside penalties under Section 78, finding no allegations of fraud, collusion, or willful misstatement. Following Greater Noida Industrial Development Authority precedent, penalties were waived under Section 80 due to reasonable cause, as the appellant's bonafide belief that their governmental activity was non-taxable constituted sufficient justification. The impugned order was modified, with appeal allowed partly on penalty grounds.