TaxTMI 
TaxTMI 
2012 (6) TMI 67
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....e disposed of without further hearing. Accordingly, after disposing the stay application for pre-deposit, we take up the appeal itself. 2. The assessee had entered into an agreement with M/s. India Gateway Terminal Pvt. Ltd. (IGTPL) for operation and management including necessary modification and augmentation of facilities for a maximum period of 8 years and 6 months from the date of commencement of commercial operation of container transport at Rajiv Gandhi Container Terminal (RGCT) at Cochin Port. In terms of the agreement, IGTPL shall pay CPT royalty every month equal to 1/3rd of the gross revenue earned by IGTPL from the operation of the project. The agreement also provides for IGTPL paying license fee for use and occupation of the ....
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....l Rs. 34,74,86,030/- Rs. 4,08,34,791/- Rs. 8,16,695/- Rs. 4,08,348/- The Commissioner also imposed penalties on CPT under Sections 76, 77 and 78 of the Finance Act, 1994. 3. The impugned order is challenged on various grounds. Royalty charges were paid by IGTPL to develop and operate RGCT within the port premises. This amount was not a consideration for any taxable service rendered by the appellant and could not be subjected to Service Tax. The licence fees received were charges for leasing out immovable property in terms of the agreement. When renting out of immovable property was brought under tax net, they have paid the appropriate Service Tax due. The upfront charges were sale consideration for transfer of va....
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....perate the container terminal as an activity falling under port services. The royalty received by the appellant is not a consideration for any port services rendered by CPT. If at all IGTPL pays service tax as demanded, the same will be available to it as cenvat credit, and can be used to meet its liability on services rendered by it. We find the impugned demand not liable to be sustained. 5.2 As regards the upfront charges, we note that these are collected from IGTPL as per Clause 6.1 of the agreement entered into between the appellant and IGTPL. The relevant clause 6.1(b) reads as follows : "The ownership of all infrastructure assets, buildings, structures, berths, wharves, equipment and other immovable and movable assets constructe....
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....this clause, ownership/lease hold rights of the equipment of the appellant shall stand transferred to the licensee from the date of receipt of first instalment of the upfront payment. The leasehold rights and ownership of crane leased from M/s. ABG Heavy Industries Ltd., was also passed on to the licensee. The consideration received was accounted in the financial records of CPT as sundry debtors and the value of the assets written off at the written down value of Rs. 7.6 crores. Even if the equipment is held to have been leased to IGTPL and not sold, we find that no tax can be levied on the consideration as it is not received towards port services rendered by CPT. 5.3 As regards the rental amounts collected for renting out various jettie....