TaxTMI 
TaxTMI 
2018 (8) TMI 1174
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....vided necessary space for a departmental store-cum-coffee shop in part of that premises. For providing the same Pantaloons agreed to pay the appellant firm an amount calculated as percentage on the basis of net sales during the year. (ii) Another agreement was entered into between the appellant and M/s. Trent Ltd. for creating another store for retail sale of readymade garments and other household items, accessories in same premises. In terms of this agreement also the appellants were to be given a percentage of net sales depending upon the total sales turnover. (iii) After considering the said two agreements department was of the view that the consideration received in terms of the said agreement was nothing but rent for provision of the space for setting up the said stores and hence taxable under the category of "Renting of Immovable Property" w.e.f. 1.6.2007. (iv) Accordingly notice dt.18/22.10.2012 was issued demanding service tax to the tune of Rs. 2,56,65,366/- along with interest and for imposition of penalty under Sections 76,77 and 78. (v) The show cause notice was adjudicated by the Commissioner confirming the demand of the service tax ....
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....ocurement policies; (viii) Documentation and information systems. b] SAS shall, whenever required by the company provide all such assistance to the company, as may be reasonably required by the company for successfully running the said business. 6. OTHER RIGHTS AND OBLIGATIONS: a] The parties to this Agreement agree to prepare and sign an inventory of items provided by them in respect of the said premises within 7 days from 02-08-2003. b] SAS shall be entitled to transfer or assign its right, title and interest in the said premises, only after obtaining the prior written consent of the company. SAS shall not undergo any change in its constitution or change in its partners. c] The parties shall jointly work out a sales strategy for successful and profitable running of the business. d] The company and SAS covenants with each other to perform the terms and conditions of this agreement. e] The parties will in all matters act loyally and faithfully to the Business Arrangement. f] The parties will not in selling the goods make any representation or give any warranties other than those permitted by the compan....
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.... (iv) Security arrangement, both inside and outside the subsisting space; (v) Interaction and liaison with the Builder, Licensor, Owner's Association, if any, in connection, with seeking their permission and/or approval for any matter or otherwise; (vi) Advice relating to marketing strategies; (vii) Procurement policies; (viii) Documentation and information systems. b] SAS shall, whenever required by the company provide all such assistance to the company, as may be reasonably required by the company for successfully running the said business. OTHER RIGHTS AND OBLIGATIONS : a] The Parties to this Agreement agree to prepare and sign an inventory of items provided by them in respect of the said premises within 7 days from 7th October, 2002. b) SAS shall be entitled to transfer or assign its right, title and interest in the said premises, only after obtaining the prior written consent of the Company. SAS shall not undergo any change in its constitution or change in its partners. - c] The Parties shall jointly work out a sales strategy for successful and profitable running of the business. d] Th....
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....ts have been entered much prior to levy coming into force. In support of their contention they relied upon the following decisions: (a) CCE V. Wonderax Laboratories - 2010 (255) ELT 60 (Del.) (a1) Upheld by SC- 2010 (255) ELT 16 (SC) (b) Photo Kina Chemicals Pvt. Ltd. - 2009 (235) ELT 83 (T) (c) Coca-Cola India Pvt. Ltd. 2007 (213) ELT 490 (SC) (d) Jamshedpur Beverages - 2007 (214) ELT 321 (SC) (e) Toyo Engineering 2006 (201) ELT 513 (SC) (f) Ballarpur Industries - 2007 (215) ELT 489 (SC) (g) Champdany Industries Ltd. - 2009 (241) ELT 481 (SC) (h) Shital International - 2010 (259) ELT165 (SC) 4.5 Finally he concluded stating that since there was no suppression, mis-statement, fraud, collusion etc. with intention to evade payment of tax penalty is not imposable on them. 5. Arguing on behalf of Revenue Ld. AR submits that: 5.1 The Agreement with M/s. Pantaloons and M/s. Trent are nothing but agreement for providing space for conducting the business of retail sale and hence appropriately and land/lease agreement for the same. Therefore the considerations received in terms of the said agreement sh....
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....ies Ltd. Vs. Vs. CCE [1999 (112) ELT 665 (Tribunal)] (f) Central Coalfields Ltd. Vs. CCE [1999 (106) ELT 476 (Tri.)] 5.6 He submits that since tax has been not paid at the time demand for interest is leviable against the appellant. 5.7 Since they have evaded payment of taxes by deliberately suppressing the facts penalty under Section 78 of the Finance Act, 1994 is justifiable. 5.8 Since they have not filed proper ST-3 Returns penalty under Section 77 is justified in terms of decision in case of Stellar Travels Pvt. Ltd. Vs. CCE Mumbai reported in 2002 (146) ELT 388 (Tri.) and also in view of non-payment of service tax penalty under Section 76 rightly imposed. 6. We have gone through the submissions made by both and also written submissions filed. The issues for consideration in the present appeal can be listed as follows: "(i) Whether the agreements between the appellant and M/s. Pantaloons and M/s. Trent Ltd. can be treated as agreement for renting of space or are these agreements only for profit sharing. (ii) Whether service tax can be levied in respect of the services provided by the appellant under these agreement under the category of ren....
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.... of all products sold from the said premises between Rs. 30 Crores to Rs. 50 Crores 4.75% of Net Retail Sales exceeding to Rs. 50 Crores. (e) The total annual fees receivable by SAS under this Business Arrangement for each year commencing from April to March, shall be calculated on the basis, as stated in clause 3[a] above, and shall be computed on the audited figures of the actual annual Net Retail Sales of the said business form the said premises. The difference in the amounts so determined and aggregate of the fees already paid for the year to SAS at the end of each month period of that year. , shall be paid refunded to/by SAS within 7 days from the end of the year, i.e.by 31st March of each year." 4. OBLIGATIONS OF THE COMPANY: a] The company shall punctually pay all charges and taxes with regard to the running of the business, including the charges for telephone [as per bills received from the service provider] electricity [as per the meter reading which meter is installed in the premises of the company and bills received from the provider] and all other agreed outgoings including maintenance charges, till the expiry of the period of thi....
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....immovable property" includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce but does not include - (i) renting of immovable property by a religious body or to a religious body; or (ii) renting of immovable property to an educational body, imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre. [Explanation 1. - For the purposes of this clause, "for use in the course or furtherance of business or commerce" includes use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple-use buildings;] [Explanation 2.- For the removal of doubts, it is hereby declared that for the purposes of this clause "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;]" 8.1 In terms of the above definition the renting includes not mere renting but any similar arrangements in respect of immovable property for use in furthe....
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...., then deliberate, then it is not in the realm of inaction of the assessee but with the objective of a gain, which in other words would be conscious withholding of the information. Thus unhesitantly we conclude, on the facts of this case, proviso to section 11 would be applicable, hence, show-cause notice is held to be within time." 9.1 Applying the above ratio to the facts of the case before us, the invocation of extended period of time to confirm the tax demand cannot be faulted at all and we hold accordingly. The Honourable High Court of Gujarat in Salasar Dyeing and Printing Mills P. Ltd. v. Commissioner of Central Excise and Customs, Surat-I [2013] 290 ELT 322 (Guj) has held that: "15. Upon reading the relevant provisions contained in section 11A of the Act, it becomes clear that in the case of duty which has not been levied or paid, or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion, wilful misstatement, suppression of facts, etc., period of service of notice on the person chargeable with such duty would be five years instead of one year provided in normal circumstances. Nowhere does this provision refer to the period of s....
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....1 SCC 571] held as follows- "12. Submission was also made regarding use of the extended period limitation contending inter alia that such extended period of limitation could not have been used by the respondent. The aforesaid contention is also found to be without any merit as the appellant has not obtained L-4 licence nor they had disclosed the fact of manufacturing of the aforesaid goods to the department. The aforesaid knowledge of manufacture came to be acquired by the department only subsequently and in view of non- disclosure of such information by the appellant and suppression of relevant facts, the extended period of limitation was rightly invoked by the department." 9.5 Hon'ble Allahabad High Court has in case of Commissioner of Central Excise vs Rathi Steels [2015-TIOL-1416-HC-ALL-CX] held has held that- "The assessee, in response to the show-cause notice had stated that there is no provision in Central Excise Law to disclose the details of the credit or to submit the duty paying documents, which in our opinion is false and an attempt to deliberately contravene the provisions of the Act, 1944 and the rules made thereunder with an intent to evade the d....
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....ase, there were divergent views of the various High Courts, the issue as to whether crushing of bigger stones or boulders into smaller pieces amounts to manufacturer. In these facts, it was held that if the assessee had not taken licence or he did not pay the duty, the extended period of limitation could not be invoked. For the reasons recorded above, we find that the Tribunal under the order impugned is not justified in recording a finding that the extended period of limitation cannot be invoked, inasmuch as from what has been recorded by us herein above, it is crystal clear that there has been suppression of material fact as well as contravention of the provisions of the Act, 1944 and the rules framed thereunder at the hands of the assessee with an intent to evade the demand of excise duty. Therefore, extended period of limitation had rightly been invoked in the facts of the present case." 9.6 Reliance placed by the notice on the cases of Coca-Cola India Pvt. Ltd. 2007 (213) ELT 490 (SC) and Jamshedpur Beverages - 2007 (214) ELT 321 (SC) to argue with regards to Revenue Neutrality do not hold good as Revenue Neutrality cannot be a global concept but needs to be seen v....
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....same transaction, or from the same act of the person concerned. But we are of opinion that the incidents of imposition of penalty are distinct and separate and even if the offences are committed in the course of same transaction or arises out of the same act, the penalty is imposable for ingredients of both the offences. There can be a situation where even without suppressing value of taxable service, the person liable to pay service tax fails to pay. Therefore, penalty can certainly be imposed on erring persons under both the above Sections, especially since the ingredients of the two offences are distinct and separate. Perhaps invoking powers under S. 80 of the Finance Act, the appropriate authority could have decided not to impose penalty on the assessee if the assessee proved that there was reasonable cause for the said failure in respect of one or both of the offences. However, no circumstances are either pleaded or proved for invocation of the said Section also. In any event we are not satisfied that an assessee who is guilty of suppression deserves such sympathy. As such, we are of opinion that the learned Single Judge was not correct in directing the 1st appellant to modify....