TaxTMI 
TaxTMI 
2023 (12) TMI 445
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....oresaid amount of Service Tax against the Noticee under Section 75 of the Act. (iii) I hereby impose a penalty of Rs.31,70,392.00 (Rupees Thirty One Lakhs Seventy Thousand Three Hundred Ninety Two only) upon the Noticee under Section 78 of the Act for the period from July'12 to March'14. (iv) I also impose a penalty of Rs.5,52,257.00 (Rupees Five Lakhs Fifty Two Thousand Two Hundred Fifty Seven only), upon the Noticee under Section 76 of the Act for the period from April' 14 to March'15. (v) I also impose a penalty of Rs.10,000.00 (Rupees Ten Thousand only) upon the Noticee under Section 77 of the Act. (vi) I hereby also demand Late Fee of Rs.1,20,000.00 (Rupees One Lakh Twenty Thousand only) for non-submission of ST-3 returns under Section 70 of the Act read with Rule 7C of the Rules, as discussed above." 2.1 Appellant has been giving the premises situated at Krishi Pradarshini, Aligarh on rent to different vendors/persons for carrying out business from that premises. The premises comprises of certain constructed shops and vacant land which is used for providing the space for parking of sand/soil filled trucks and vehicles. Re....
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....unt of Rent collected Rate of Service Tax Service Tax payable (including Ed. Cess & S.H. Ed. Cess) July, 2012 to March, 2014 5,13,00,835.00 12.36% 63,40,783.00 Total 63,40,783.00 2.4 This show cause notice also proposed to demand interest under Section 75 and proposed imposition of penalties under Section 77 and 78 of the Finance Act, 1994 and penalty and late fee are imposed for non-submission of ST-3 returns under Section 70 of the Act read with Rule 7C of Service Tax Rules, 1994. 2.5 Subsequently, a statement of demand dated 22.03.2016 was issued seeking to demand of service tax, which is as follows:- IN CASE OF CONSTRUCTED SHOPS/BUILDING: Period Amount of Rent collected (IN Rs.) Rate of Service Tax Service Tax payable (including Ed. Cess & S.H. Ed. Cess) (In Rs.) April, 2014 to March, 2015 59,31,290.00 12.36% 7,33,107.00 TOTAL 59,31,290.00 12.36% 7,33,107.00 IN CASE OF VACANT LAND: Period Amount of Rent collected (IN Rs.) Rate of Service Tax Service Tax payable (including Ed. Cess & S.H. Ed. Cess) (IN Rs.) April, 2014 to March, 2015 3,87,49,700.00 12.36% 47,89,463.00 TOTAL 3,87....
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....uire Services Pvt. Ltd. [2014 (36) STR 1148 (Tri.-Del.)] Subhash Khandelwal & Sons [ 2011 (24) STR 461 (Tri.-Del.)] Century Denim [2014 (310) ELT 939 Tri.-Del.)] Reliance Industries Ltd. [2013 (293) ELT 679 (Tri.-Mumbai)] 3.3 Learned Authorized Representative reiterates the findings recorded in the impugned order. 4.1 We have considered the impugned order along with the submissions made in the appeal and during the course of argument. 4.2 We do not find any merits in the submissions of the appellant that the order has been passed in violation of the principles of natural justice. Commissioner has in para no.16 of the impugned order observed as follows:- 16. Noticee was given five opportunities of Personal Hearings, which were duly received by them. The details have been given supra, in the hearing records of P.H.; but not attended by them. Hence I am left with no option but to decide the case on the basis of available records. I also observe that it cannot be termed a violation of principles of Natural Justice in view of Hon'ble Supreme Court's decision in case of F.N. Roy Vs. Collector reported in 1983 (13) ELT 1296 (SC), wherei....
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....ther person for consideration and declared as such under section 66E. (34) "negative list" means the services which are listed in section 66D. (37) "person" includes.- (1) an individual, (ii) a Hindu Undivided Family. (ii) a company. (iv) a society. (v) a limited liability partnership, (vi) a firm. (vii) an association of persons or body of individuals, whether incorporated or not, (viii) Government, (ix) a local authority, or (x) every artificial juridical person, not falling within any of the preceding sub-clauses. (41) "renting" means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property. (44) "service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely,- (i) ....
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....at entities cany out in ordinory course of operation themselves but may obtain as services by outsourcing from others for ony reason whatsoever and shall include advertisement and promotion, construction or work contract, renting of immovable property, security, testing and analysis. 17.2 I also observe that in the instant case the information in respect of amount of rent received by the noticee in respect of shops/ building and vacant land given for commercial purpose has been obtained from the Tehsildar of Koil Tehsil/ Addl. District Magistrate (City), Distt. Aligarh, as such the service provider in the case is Government because Tehsildar/ Addl. District Magistrate are the officials of District Administration under a State Government. Furtner, certain services have been kept out of purview of levy of Service Tax under Section 668 of the Act, which have been provided in the Negative List of Services under Section 66D of the Act. The services provided by Government or a local authority during the disputed period, which have been specifically excluded from levy of service fax have been enumerated in clause (a) of Section 66D of the Act, which is reproduced below: ....
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.... the Act read with Rule 6 of the Rules. They also did not file any ST-3 half yearly Return under Section 70 of the Act read with Rule 7 of the Rules. Further the noticee has supplied the details of receipt of rent after issuance of several reminders and pursuance to them, the submission of the desire information was apparently delayed willfully. This act of reluctance and delaying tactics adopted by the noticee reveals the act of suppression of facts by them with an intention to evade payment of service tax. As such the noticee is liable for penal action under Section 78 of the Act for the period from July'12 to March'14 and under Section 76 of the Act for the period from April 14 to March 15 and penalty under Section 77 of the Act. Further, Noticee has also not filed six statutory ST-3 Returns from the period July'12 to March 15, as such they are also liable to pay Late Fee of 1.20,000.00 under the provisions of Section 70 of the Act read with Rule 7C of the Rules. Further, the penalty imposable under Section 76 of the Act is 10% of the Service Tax evaded during the relevant period." 4.4 Definition of 'Renting of Immovable Property" has been reproduced by the Commis....
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....acant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes; b. vacant land, whether or not having facilities clearly incidental to the use of such vacant land; c. land used for educational, sports, circus, entertainment and parking purposes; and d. building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities. Explanation 2.-For the purposes of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for residential or any other purposes shall be deemed to be immovable property for use in the course or furtherance of business or commerce;" 4.5 Even for the definition as it existed prior to the amendment made by the Finance Act, 2012, Allahabad Bench has vide Final Order No.70230 of 2020 dated 20/02/2020 has observed as follows:- "2. The service tax demand stands confirmed against the appellant under the category of 'Renting of Immovable Property'. We note that in the appeal memo, the appellants throu....
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....t any exception for those specified under the negative list. We do not find that appellant falls under any of the category as specified by the negative list. 4.8 Appellant has claimed the benefit of exemption under Notification No.25/2012 stating that they are registered under Section 12 AA of the Income Tax Act, as charitable society/trust for sake of convenience the relevant entries of the is reproduced bellow:- "4. Services by an entity registered under section 12AA of the Income Tax Act, 1961 (43 of 1961) by way of charitable activities;´ 4.9 From the plain reading of above it is evidence that this entry exempts the services of charitable nature of fake registered society/trust registered under Section 12AA of the Income Tax Act. It does not say that the trust/society registered under Section 12AA of the Income Tax Act is exempt from payment of service tax. The activities undertaken by the appellant are in nature of commercial activities or a consideration for providing certain income. We do not find any merits in the arguments advanced by the appellant to affect that for the reason that they are registered under Section 12AA of Income Tax Act, this exempti....
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....assessable value of the goods. A contra decision of the Tribunal came, admittedly, after January 1999. Having made an endeavour to derive benefit out of the so-called "confusion arising out of conflicting decisions of the Tribunal", the appellant cannot turn around and say that they were not aware of the Tribunal‟s decision in Flex Industries case. The facts and circumstances of this case are explicit enough for us to hold that the appellant deliberately excluded the amortized cost of moulds (supplied free of cost by Telco) from the assessable value of the excisable goods supplied to Telco (buyer) even after the Tribunal‟s decision (1997) in Flex Industries case, which was in favour of the Revenue. It appears to us that this conduct of the appellant was wilful with intent to evade payment of appropriate duty on the goods in question. For the period prior to 1997, the appellant seems to be in a position to claim support from the view taken in Bright Brothers Ltd. case (supra) and Star Glass Works case (supra). 6. We also find a valid point in the submission of the ld. SDR that the demand of duty for the extended period cannot be resisted by the appellants on the premise ....
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....e has been served under sub-section (1) of section 73 or under the proviso thereto, before the date on which the Finance Bill, 2015 receives the assent of the President; or (b) service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded and a notice has been served under sub-section (1) of section 73 or under the proviso thereto, but no order has been passed under sub-section (2) of section 73, before the date on which the Finance Bill, 2015 receives the assent of the President, then, in respect of such cases, the provisions of section 76 or section 78, as the case may be, as amended by the Finance Act, 2015 shall be applicable." From the impugned order it is quite evident that penalty has been imposed under Section 78 for the period July 2012 to March 2014 and penalty under Section 76 has been imposed for the period April 2014 to March 2015. There is no overlap in the penalty imposed under the two sections and hence the penalties imposed under these sections for different periods cannot be faulted with. Further Hon'ble Supreme Court has in case of Rajasthan Spinning and weaving Mills [2009 (238) ELT 3 (SC)] held as fo....
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....ority had no discretion in the matter. One of us (Aftab Alam, J.) was a party to the decision in Dharamendra Textile and we see no reason to understand or read that decision in that manner. In Dharamendra Textile the court framed the issues before it, in paragraph 2 of the decision, as follows : "2. A Division Bench of this Court has referred the controversy involved in these appeals to a larger Bench doubting the correctness of the view expressed in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai & Anr. [2007 (8) SCALE 304]. The question which arises for determination in all these appeals is whether Section 11AC of the Central Excise Act, 1944 (in short the "Act') inserted by Finance Act, 1996 with the intention of imposing mandatory penalty on persons who evaded payment of tax should be read to contain mens rea as an essential ingredient and whether there is a scope for levying penalty below the prescribed minimum. Before the Division Bench, stand of the revenue was that said section should be read as penalty for statutory offence and the authority imposing penalty has no discretion in the matter of imposition of penalty and the adjudicating authority in such....
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....Mr. Chandrashekharan, Additional Solicitor General submitted that in Rules 96ZQ and 96ZO there is no reference to any mens rea as in section 11AC where mens rea is prescribed statutorily. This is clear from the extended period of limitation permissible under Section 11A of the Act. It is in essence submitted that the penalty is for statutory offence. It is pointed out that the proviso to Section 11A deals with the time for initiation of action. Section 11AC is only a mechanism for computation and the quantum of penalty. It is stated that the consequences of fraud etc. relate to the extended period of limitation and the onus is on the revenue to establish that the extended period of limitation is applicable. Once that hurdle is crossed by the revenue, the assessee is exposed to penalty and the quantum of penalty is fixed. It is pointed out that even if in some statues mens rea is specifically provided for, so is the limit or imposition of penalty, that is the maximum fixed or the quantum has to be between two limits fixed. In the cases at hand, there is no variable and, therefore, no discretion. It is pointed out that prior to insertion of Section 11AC, Rule 173Q was in vogue in whi....