TaxTMI 
TaxTMI 
2024 (9) TMI 1359
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....ugh the Infrastructure Maintenance and Upgradation Funds. GIDC collects rent from lessees and pays service tax on the amount retained for infrastructure up-gradation fund. Initially GIDC proposed to create a fund by charging Rs. 9/- per sq. Mtr. as Industrial maintenance fund to be charged from the leaseholders of less than 100 hectares and Rs. 9 per sq. Mtr. as Industrial Up-gradation fund to be charged from the lease holders of more than 100 hectares but subsequently vide resolution dated 10.10.2010 it was decided for merging the Infrastructure Maintenance Fund (IMF) and the Infrastructure Up- gradation Fund (IUF) into a single fund, with new contributions set at Rs.5 per sq. meter from all the lessees out of which Rs. 2 per sq. meter would be allocated to industrial associations, and Rs. 3 per sq. meter to GIDC. A circular dated 17.07.2010 outlined quarterly payments of 40% of the collected amount to industrial associations. An audit by the Central Excise Commissionerate raised objections about GIDC's failure to pay service tax on share of 40% allocated to industrial associations. It was further observed that the appellant failed to pay service tax on the following charges c....
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....898084 1926139 1282197 Total 1564623 14398994 3483749 3675996 1308905 The appellant challenged the demand in the adjudication proceedings and the Ld. Commissioner dropped the demand of Rs. 1,41,13,393/- considering that (i) Service Tax amounting to Rs.36,75,995/-as NU Penalty which pertained to the period 01.07.2012 onwards was collected as a statutory levy and not against provisions of any kind of taxable service; (ii) Service Tax amounting to Rs. 13,08,905/- on water charges for the entire period covered under SCN, was also dropped as the water charges are not earned by the appellant by providing any services and same are considered as sale proceeds of essential commodity and also it is covered under Twelfth Schedule under Article 243W of the Constitution; (iii) Service Tax amounting to Rs. 91 28 492/-, on the amount recovered as Infrastructure Upgradation fund and Transfer Fees for the period from 01-07-2012 to March, 2016, as it is covered under Twelfth Schedule under Article 243W of the Constitution. However, it has been held in the impugned order-in-original that the appellant is liable Se....
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....lant places reliance on the decision of the Hon'ble Supreme Court in the case of UOI v. M/s. Intercontinental Consultants and Technocrats Pvt. Limited, 2018 (3) TMI 357- SUPREME COURT, wherein it was held that valuation of taxable service cannot be anything more or less than the consideration paid as quid pro quo for rendering 'such service' and the value of reimbursable expenses which are not charged towards rendition of any services provided but are merely paid for reimbursing the expenses incurred by the service provider on behalf of the service recipient should not form part of the taxable value. . Further, reliance is placed on the decision of the Hon'ble Supreme Court in the case of CST v. M/s. Bhayana Builders (P) Limited, 2018 (2) TMI 1325-SUPREME COURT, wherein the Hon'ble Apex Court analysed the scope of Section 67 of the Act, 1994 and categorically held that the amount charged should be 'for such service provided'. By using the words 'for such service provided" the Act has provided for a nexus between the amount charged and the service provided. In absence of such nexus, the consideration received by the assessee cannot form part of the to....
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....ude Karnataka Industrial Areas Development Board v. Commissioner of Central Tax, Bangalore North - 2020 (6) TMI 227- CESTAT BANGALORE and CCE, Nashik v. Maharashtra Industrial Development Corporation -2018 (2) TMI 1498 - BOMBAY HIGH COURT. Therefore, the amounts collected by the Appellant as Infrastructure Upgradation Fund, Transfer Fee, and Miscellaneous charges are statutory levies, and no service tax should be levied. He finally argued that the entire demand is liable to be set aside on this basis. He further argued that the extended period of limitation should not apply as there was no suppression of facts. The Appellant, being a governmental authority, should be presumed to act with no malafide intent. Since there is no valid demand for service tax, no interest or penalties should be levied. 5. Shri Mihir G Rayka, learned Additional Commissioner (AR) arguing on behalf of the department has reiterated the findings of the impugned order and emphasized that the demand has been correctly confirmed against the appellant. He argued that the appellant has failed to account for the misc. receipts and prove that same pertain to exempted services and further though GIDC qualifies as ....
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....onstitute provision of taxable service to a person and, therefore, no service tax is leviable on such activities. However, if such authority performs a service, which is not in nature of statutory. activity and the same is undertaken for a consideration not in the nature of statutory fee/levy. then in such cases, service tax would be leviable. if the activity undertaken falls within the ambit of a taxable service." It has been accepted in the impugned order that the "Infrastructural up-gradation fund" and "transfer fees" were covered under article 243W which is a statutory function of the state government covered under the expressions "Regulation of land use and construction of buildings,' 'Roads and bridges,' and 'Planning for economic and social development" and GIDC is a state undertaking which is performing these functions in the state for development of industry in the state. Once it is accepted that these are the statutory functions of the state, the same cannot be exigible to tax under the period prior to 01.07.2012 also. Further misc. receipts which are stated to be in respect of as sub- letting fees, subdivision charges, amalgamation fees, collateral fees a....