TaxTMI 
TaxTMI 
2015 (4) TMI 1231
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.... & 78 of the Finance Act, 1994 has been set-aside. With regard to the order-in-original dated 30-4-2013, a direction has been issued to the Commissioner for de novo adjudication in light of the direction issued in the order of the Tribunal. 3. The assessee before this Court claims to be a statutory body constituted under the U.P. Industrial Development Act, 1976. It is their case that they have been discharging statutory functions, while monitoring and carrying on the development of the areas within their territorial jurisdiction. The assessee was registered for the purpose of the payment of Service Tax on renting of immovable properties, services and sale of space for advertisement since 1-6-2007. It has been making payment of Service Tax on the rent received from constructed immovable properties rented out by it for business or commerce. However, the assessee had not made payment of Service Tax on the rent which it had received in the matter of allotment of plots of vacant land to various persons on lease for industrial and commercial purposes. 4. With effect from 1st June, 2007, Section-65(105)(zzzz) was introduced in Finance Act, 1994. The section provides for S....
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....of this clause, "for use in the course or furtherance of business or commerce" include use of immovable property as factories, office buildings, warehouse, theatre, exhibition halls and multiple use building. Explanation-II to this Section clarifies that for the removal of doubts, it is hereby declared that for the purpose of this clause, renting of immovable property" include allowing of permitting the use of space in an immovable property, Irrespective of the transfer of possession or control of the said immovable property". 7. The Director General of Central Excise on the material evidence collected found that the appellant before this Court has shown income from leasing of vacant land for the purpose of construction of commercial buildings, but they had not paid any Service Tax thereon. Accordingly, a show cause notice dated 19-3-2012 was issued to the appellant for the period 1-7-2010 to 31-5-2011, whereunder it was disclosed that the appellant received a total amount of Rs. 40,14,15,820/- as lease charges from the allotment of various plots of land for commercial purposes on which Service Tax was payable. The appellant was, therefore, called upon to pay Servi....
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....od of limitation period to be quantified by the Commissioner on remand. Penalty on the appellant under Sections 77 and 78 has been set aside. The order in original dated 30th April, 2013 has been set aside and the matter has been remanded to the Commissioner for de novo adjudication in light of the order of Tribunal. The assessee being aggrieved has filed the present central excise appeal. 14. The present central excise appeal was entertained by the High Court under order dated 11th March, 2015 on following questions of law : "(i) Whether a second show cause notice for raising of demand of Service Tax is not permissible, once notice was already issued on this aspect despite the fact that second notice pertain the different period and different items/transactions which were subject matter of Service Tax provided under first notice? (ii) Whether long terms leases in respect of vacant land would be covered by "taxable service" under Section 65(105)(zzzz) of Finance Act, 1994? (iii) Whether Greater Noida Industrial Development, Noida constituted under the Industrial Development Act, 1976 can be said to be a bo....
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....s, it cannot be subjected to Service Tax. 18. The basic dispute giving rise to the present appeal is in respect of the payment of service tax on the rent which had been received in the matter of allotment of plots by the assessee to use for construction for business/commercial purposes during the terms of the lease. 19. The Explanation to Section 65(105)(zzzz) of the Finance Act defines immovable property, which includes vacant land. The Expression renting of immovable property as defined under Section 65(90a) means renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce. The Explanation to Section 65(90a) has further clarified the clause "for use in the course or furtherance of business or commerce" to include use of immovable property as factories, office buildings, warehouses etc. and it has been declared that "renting of immovable property" includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the said immovable property. 20. In view of the definition of expression of "renting of immov....
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.... that under Section 105 of the Transfer of Property Act, transfer of a right to enjoy immovable property made for a certain time in consideration for a price paid or promised would be a lease. 26. Judged in the aforesaid background we do not find any illegality in the conclusions drawn by the Tribunal that the lease of immovable property under Section 65(105)(zzzz) would be covered for Service Tax, irrespective of the fact that the lease is short term or long term or lease in perpetuity. 27. So far as the overlapping of the period under first show cause notice dated 22nd March, 2012 i.e. July, 2010 to May, 2011 and the second show cause notice dated 17th October, 2012 for the period between May, 2007 to March, 2012 is concerned, the Tribunal has held that it is not clear as to whether Service Tax demanded under show cause notice dated 22nd March, 2012 is included in the show cause notice dated 17th October, 2012 for want of cooperation from the assessee. It is for this purpose that the Tribunal has remanded the matter to the Commissioner to examine the said plea by de novo proceedings and to give a specific finding in that respect. The Tribunal has accordingly affir....
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....n clarified that activities assigned to and performed by the sovereign/public authorities under the provisions of any law are statutory duties. The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy and are deposited into the Government account. Such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. Therefore, such activities assigned to be performed by a sovereign/public authority under the provisions of any law, do not constitute taxable services. Any amount/fee collected in such cases are not to be treated as consideration for the purposes of levy of Service Tax. 33. However, if a sovereign/public authority provides a services, which is not in the nature of an statutory activity and the same is undertaken for a consideration (not a statutory fee), then in such cases, Service Tax would be leviable as long as the activity undertaken falls within the scope of a taxable service as defined. 34. Letting of immovable property for consideration, which is determined on t....