TaxTMI 
TaxTMI 
2019 (5) TMI 144
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....he service tax. On verification of records, it was noticed that they had received additional amounts in the name of rent for warehousing and storage of goods for their own godowns along with commission for the services rendered by them under the category of 'Clearing and Forwarding Agent'. They discharged the service tax on the amounts collected by them as commission but not on the gross/total amounts received by not including rental amounts received. During the period April 2003 to May 2007, they had collected amounts towards rent on which the differential service tax of Rs. 17,23,786/- is payable according to the Revenue. The appellant was issued a show cause notice demanding service tax as above on the amounts collected by them as rent f....
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....ng and forwarding agents as per agreements they had with the clients. In addition, they also have rental agreements for storing and warehousing of the goods. Seven of these agreements pertain to various parties on which they received the rent. To these parties, they had not rendered the services of clearing and forwarding agency and therefore in the impugned order the Commissioner dropped the demand insofar as the amounts collected as rent under these agreements was concerned. However, in respect of M/s LG Electronics Pvt. Ltd., they have two agreements one of which is as their clearing and forwarding agents and they have been discharging the service tax on the amounts collected for these services. They have a separate agreement with M/s LG....
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....harged under Clearing & Forwarding Agency services. It does not matter if the contract is split into two parts by the assessee. Thus holding, he confirmed the demand of service tax on the rental income which they received from M/s LG Electronics Limited as per their rent agreement for the value of Clearing & Forwarding Agency services rendered by them and confirmed differential duty along with interest and imposed penalties. 3. Ld. Counsel for the appellant would argue that renting of immovable property is a separate service which became taxable from 01.06.2007 and it was not taxable during the relevant period. Therefore, they are not liable to pay service tax on the rental income received by them. He would argue that the rental income is....
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.... ratio of this judgment will squarely apply to their case and therefore their appeal may be allowed. 4. A related issue was whether an appeal can be entertained by the Tribunal in respect of an order-in-revision issued by the Commissioner under section 84 as it stood prior to 2009 where the order was issued after this date. In brief, prior to 2009, the Commissioner of Central Excise had the authority to revise an order issued by an Officer lower than him in rank. On 19.08.2009, by Finance Act (2) of 2009, this section has been substituted with provisions for appeal before the Commissioner of Central Excise (Appeal). When the section was amended, an explanation was added to it to remove doubts that any order passed by adjudicating officer,....
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....hem would show that they are Clearing & Forwarding Agents only. Clearing & Forwarding Agent services include receiving goods, storing them and forwarding them. Storage would require some expenses which are also to be recovered from the clients. The appellant has been providing these services to M/s LG Electronics Limited but artificially split their agreements into two - one for agency commission and another for renting of immovable property. In substance, both are part of the same service i.e. Clearing & Forwarding Agent services, for which they are receiving the service charges under two different parts. Therefore, they are liable to discharge service tax on the entire amount along with interest. On the question of limitation, he would ar....
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....case of Revenue that the split of the contract into two agreements is an artificial one as storage is an integral part of the C&F services, the rent collected on storage of goods must be included in the value of taxable services rendered. On the other hand, it is the case of the assessee that renting of immovable property was not a taxable service during the period. There was no artificial division. They had entered into two different contracts with M/s LG Electronics Limited. The agreement which they have entered into with respect to rent with M/s LG Electronics Limited is similar to the agreement which they have entered into with other clients to whim they were not rendering the Clearing & Forwarding Agent services. In respect of other cl....