TaxTMI 
TaxTMI 
2025 (6) TMI 519
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....confirmed a demand of Rs.50,75,26,810/- towards service tax payable including cesses, under Section 73(1) of the Finance Act, 1994 (ACT) read with Section 73 (2) of the Act read with Section 174 of the CGST Act, 2017 (CGST Act) for the period from 01.01.2013 to 31.03.2014, along with interest at appropriate rates. In respect of the first notice, the adjudicating authority imposed a penalty of Rs.11,98,32,990 on the appellant under first proviso to Section 78(1) of the Act read with Section 174 of the CGST Act and in respect of the second notice, a penalty of Rs.13,39,30,415/- under Section 76 of the Act read with section 174 of the CGST Act was imposed. Further, a penalty of Rs.40,000 under section 77(2) of the Act read with Section 174 of the CGST Act for each violation in respect of both the notices was also imposed. 2. The facts relevant to the analysis of the issue at hand are that the appellant holds Service Tax Registration for provision of 'Renting of Immovable Property' and has, in terms of Section 70 of the Act, self-assessed the service tax liabilities in respect of the appellant's property, namely, SIV tower at Avinashi Road, Coimbatore and filed periodical STC return....
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....ry people for retail construction market. iv. He furnished the details of payment received towards quarrying and carrying away the minerals for the period from January 2010 to March 2012. v. He furnished the details of payment made to the appellant from February 2010 to March 2012. 5. Subsequently, vide his letter dated 10-10-2013, Shri M. Palanisamy (lessee) furnished the "Lease Rent payable' and 'Lease Rent paid' for the period from April 2012 to September 2013. The lessee also provided copy of Joint Agreement dated 27-07-2010 between the appellant (Lessor), Lessee and the District Collector, Coimbatore "for quarrying and carrying away minor minerals by lessees in Ryotwari Lands in which the minerals belong to Government". The preamble of the agreement too acknowledges the fact of the appellant (lessor) leasing out the said land to the lessee for the purpose of quarrying Rough Stone. 6. A statement was recorded from Shri M. Palanisamy on 10-12-2013, wherein he inter-alia reiterated the leasing of 22.68 acres of land and 14.86 acres of land in Palathurai Village belonging to the appellant from 29-01-2010 and 17-05-2010, for which rent of Rs.22,680/- and Rs.....
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....ation. In addition, they assist in providing medical facility in Government Hospital and also provided donations to Government Schemes. ii. The main source of income of the appellant is through rent from buildings owned by them and also rent received from vacant lands leased. iii. The appellant is registered with service tax department under 'Renting of immovable property service' and are paying tax on rent received from buildings and are filing ST-3 returns regularly for the above. iv. The appellant was not aware of service tax liability on leasing of the vacant land at Palathurai Village w.e.f 01-07-2012 as they were of the opinion that the same is exempted from service tax. 9. Subsequently the appellant vide letter 18.11.2013 addressed to the Commissioner of Central Excise and Service Tax, Coimbatore stated that there are in the process of consultation with legal experts and would revert soon. Later, by their letter dated 07.12.2013 the appellant informed that they are opting to pay tax under Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) for the period up to December 2012. According, the appellant filed a declaration in Form VCE....
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....f state levy cannot be subjected to Service Tax. Reliance was placed on the decisions in: a) Gujarat Ambuja Cements Ltd. v. UOI, 2006 (3) S.T.R. 608 (S.C.) b) BSNL v. UOI,2006 (2) S.T.R. 161 (S.C.) c) Imagic Creative Pvt. Ltd v. CCE, (2008 (9) S.T.R. 337 (S.C.) iv) That the instant transaction was a revenue sharing agreement and the Hon'ble Supreme Court has stated that Revenue sharing agreement are not exigible to Service Tax. Reliance was placed on the decisions in: a) New Horizons Ltd. Vs Union of India, (1995) 1 SSC 478 b) Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd., 2008 (12) STR 401 (SC). c) Commissioner vs Mormugao Port Trust - 2018 (19) GSTL J118 (SC) d) ACL Mobile Ltd. Vs CCE, Delhi 2019 (20) GSTL 362 (Tri.-Del.) e) The Executive Engineer, Urban Division, Tamil Nadu Water Supply and Drainage Board, Madurai vs CCE, ST Madurai 2018 (5) TMOI 1467-CESTAT, Chennai f) Cricket Club of India Ltd vs CST, Mumbai 2015 (40) STR 973 (Tri.-Mum.) v) That the tax liability cannot be imposed solely based on nomenclature and accounting treatment. That the Revenue sharing agreements termed t....
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....y for the subsequent periods. The declaration in FORM VCES-1 erroneously filed by the Noticee under pressure and payment made under protest ought not to prejudice its case before the Department. ix) The lease agreement specifies the lease rent payable and there can be no presumption regarding the consideration agree on foreign activity. Reliance is placed on the decision in Akzo Nobel India Ltd vs CCE, Kanpur 2018 (11) GSTL 420 (Tri.-All.) x) Extended period of limitation is not invokable and penalties are not imposable. Reliance was placed on the decisions in: a) Commissioner of Central Tax vs. Zee Media Corporation. 2018 (18) G.S.T.L. 32 (All) b) Anand Nishikawa Co. Ltd. v. Commissioner of Central Excise, Meerut. rr2005 (188) E.LT. 149 (SC) c) Continental Foundation It. Venture v. CCE. Chandigarh-L 2007 (216) ELT.177 (S.C.) d) CCE, Mumbai IV v. Damnet Chemicals Pvt. Ltd., 2007 (216) ELT 3 (S.C.) e) Padmini Products Limited v CCE, 1989 (43) ELT 195 (SC) f) Pushpam Pharmaceuticals Company v. CCE, 1995 (78) ELT 401 (SC). g) Hindustan Steel Ltd. v. State of Orissa, 1978 (2) ELT (J159) (SC), h) B....
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....and reference No.279/2010/MMI dated 27.07.2010 of the District Collector, Coimbatore to the Sub-Registrar, Madukkarai at Annexure B and APPENDIX V, a registered document dated 27.07.2010 at Annexure C signed Shri. A. Senthilkumar, for the appellant, Shri. M. Palanisamy and the District Collector. Reliance is placed on Department Circular No.109/3/2009-ST dated 23.02.2009 at Annexure H for the contention that revenue sharing agreements where contracting parties act on a principal-to-principal basis will not be liable to tax. Reliance is also placed on the decisions in: a) New Horizons Ltd vs Union of India, (1995) 1 SCC 478 (Annexure D) b) Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd., 2008 (12) STR 401 (SC) (Annexure E) c) Commissioner vs. Mormugao Port Trust-2018 (19) GSTL J118 (S.C) (Annexure F) d) ACL Mobile Ltd. vs. CCE, Delhi 2019 (20) GSTL 362 (Tri Del.) (Annexure G) e) B.G. Exploration & Production India Ltd. vs COMMISSIONER OF CGST & CX, NAVI MUMBAI, 2022 (64) G.S.T.L. 578 (Tri. Mumbai) (Annexure I) f) B.G. Exploration & Production India Ltd. vs COMMISSIONER OF CGST & CX, NAVI MUMBAI, 2022 (63) G.S.T.L. 351 (Tri. Mumbai....
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.... or ascertaining if it is indeed a transaction exigible to Service Tax, the amounts apportioned between the appellant and the lessee for the revenue earned from mining and sale of quarried resources were sought to be included in the taxable value of renting of immovable property services ignoring the fact that the instant transaction is one of revenue-sharing. Reliance is placed on the decision in The Executive Engineer, Urban Division, Tamil Nadu Water supply and Drainage Board, Mumbai vs CCE & ST Madurai, 2018 (5) TMI 1467-Cestat Chennai (Annexure b) for the contention that every flow of money between two entities or persons would not be termed as consideration, unless the money flow implied a reciprocal promise to be done on part of the recipient of the money at the behest of the person making the payment. Reliance is also place on Cricket Club of India Ltd. vs CST, Mumbai 2015 (40) STR 973 (Tri.-Mum), (Annexure c) to contend that existence of consideration cannot be presumed in every money flow. D. Liability cannot be imposed only based on nomenclature and accounting treatment. That the revenue-sharing agreements termed the profits realized from extraction and sale of ....
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....x Print & Processors Pvt. Ltd. vs Customs & Central Excise Settlement Commission, 2011 (8) TMI 665- (Annexure k). G. The finding at paragraph 21.8.5 of the impugned order, where it was concluded that there is no joint control over the operation and that the intention was to render service for the consideration agreed upon in the agreement is refuted. The impugned order is incorrect in this regard as a perusal of the agreements would show that there has been a grant of several rights to the lessee, namely (1) lease of land by trust to the lessee, (2) grant of permission to extract minerals from the land, and (3) grant of permission to sell the extracted minerals. These rights that are otherwise vested exclusively with the appellant, have been conferred on the lessee. The lease rent collected is towards grant of possession of land, and the consideration computed as a sum equal to 75% of the receipts earned by sale of minerals, is in furtherance of revenue-sharing agreement between the lessor and lessee. The lessor and lessee in the instant case, have agreed to undertake the activity of mining the land for minerals. In order to commence mining activity on the land, capital ex....
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....xcise and Service Tax Lax and is of no consequence or relevance for Service Tax purposes. Reliance is also placed on the decision in CCE, Pune vs Dai Ichi Karkaria Ltd. 1999 (112) ELT 353 (SC) wherein it was held that judgments relating to Income Tax has no relevance while considering a provision in an excise statue. The main source of income for the Appellant Trust is through rent from buildings owned by them and also rent received from vacant lands leased and since the appellant is registered under the erstwhile Service Tax regime to discharge service tax under the head "Renting of Immovable Property", wherever liable, the Appellant would discharge Service Tax at the applicable rates and would file the ST-3 Returns diligently. Thus, merely because of availment of exemption under a different law will not ipso facto determine the nature of service under the Finance Act, and in case any deficiency is noticed under income tax it is responsibility of the central excise authorities to bring it the notice of the income tax authorities for remedial action but in this case the deficiency happened under IT Act is being misused to levy the service tax which is not correct. I. The i....
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....e demand has been sourced from the documents produced by the Appellant. • There was no Suppression with an intent to evade payment of tax • The issue involves statutory interpretation, having travelled up to the Hon'ble Supreme Court • Suppression cannot be alleged in a situation where the Department was aware of the Appellant's activities. • The District Collector vouched the entire activity by signing the APPENDIX V as a representative of Govt of Tamil Nadu Reliance is placed on the decisions in Commissioner of Central Tax vs. Zee Media Corporation. 2018 (18) G.S.T.L. 32 (All) (Annexure q), Anand Nishikawa Co. Ltd. v. Commissioner of Central Excise, Meerut, 2005 (188) E.LT. 149 (SC) (Annexure r), Continental Foundation It. Venture v. CCE. Chandigarh-L 2007 (216) ELT.177 (S.C.), CCE, Mumbai IV v. Damnet Chemicals Pvt. Ltd., 2007 (216) ELT 3 (S.C.) and Padmini Products Limited v CCE, 1989 (43) ELT 195 (SC) in this regard. M. That penalty is not imposable for the reasons that the Appellant was under a bona fide belief that no service tax was liable to be paid and since the appellant had reasonable cause to....
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....als belong to Government vide which Collector on behalf of Govt has granted a quarrying lease to the LESSEE Shri M Palanisamy. (Para 21.2/Pg 57) iv. Details of Profit and Loss Account of Shri M Palanisamy/Lessee showing lease rent payable by them at Pg 58 v. Details of ledger account of Shri M Palanisamy, the lessee at Pg 60 vi. Details of Income and Expenditure Statement of Trust showing receipts as RENT at Pg 62 vii. Details of Ledger Extract of Trust showing receipt of Lease Rent to the Trust at Pg 63 viii. Details of Balance Sheet and Income and Expenditure Account of the Trust showing lease rent received from Shri M Palanisamy at Pg 65 ix. TDS Certificates issued by ACIT authorizing Shri M.Palanisamy to pay RENT to TRUST without deduction of TDS at Para 21.4 of OIO/Pg 68 B. The appellant/trust has leased out certain lands to Shri Palanisamy by executing two lease deed documents dated 11.02.2010 and 19.06.2010, both titled 'Lease deed' and same were registered before Sub registrar. As per said documents, the appellant has leased several acres to lessee, Shri M Palanisamy and the annual lease rent of Rs.1000/- per ac....
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....ould show that the appellant activity gets easily covered under the said definition. The definition states that renting means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partially, 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. The lease of immovable property finds mention in Section105 of Transfer of property Act,1882 and extracting the same, it is contended that the definition of leasing in Service Tax, rent in IT Act and lease in immovable property in transfer of immovable property Act are clear unambiguous and wide enough to cover the subject transactions of the appellant. That as per Section 66 D of the Act, the Negative List incorporates exclusion of renting or leasing activity fully in relation to agriculture whereas renting of immovable property services is a declared service as per Section 66E(a) of the Act. F. That the contention of the appellant that it is a sale transaction liable to VAT and not Service Tax has already been addressed by the Adj....
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....ed adjudicating authority has referred to the case of Faquir Chand Gulati vs Uppal Agencies 2008 STR 401 SC and New Horizons Ltd vs UoI 1995 SCC 478 where the nature of JV was considered. In the said proceedings, lordships have referred to various definition of JV occurring in American jurisprudence, definition in Corpus Juris Secundum, definition in Black Law Dictionary and have given certain illustrations also in certain different context of agreement between owner of land and a builder. That JV is defined as an association formed to carry out a single business enterprise for profit. Each Joint Venturer must stand in the relation of Principal. No single party will determine whether the JV exists. It is a business undertaking of two or more persons engaged in a single defined project. From a plain reading of said Notarized Agreements, it is evident that such an agreement is not JV, as understood in law. There appears to be no contract for association of persons for an activity, namely, mining and selling of Blue Minerals. The fact that both the Parties have not considered said agreement as JV is also clear from the documents which shows that Shri M.Palanisamy has duly accounted su....
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....the counsel have no application in the facts of the present case and that the learned adjudicating authority has also relied upon CST, Delhi vs Gourmet Food 2018 GSTL 348 affirmed by Apex Court to buttress his findings that there is no scope for interpreting the said agreement as Joint Venture agreement for mining and selling of Govt owned Minerals. L. The extended period has been rightly invoked as the case of Revenue rests on detailed investigation, statements and documents gathered from Lessee and the appellant. Evidences such as the two Documents titled "lease deed" executed on 11.02.2010 and 19.07.2010; the two Notarized Agreements dated 29.01.2010 and 17.05.2010; the agreement titled Form of Joint Agreement for Quarrying and carrying away minor minerals by Lessee in Ryotwari Lands in which the Minerals belong to Government vide which Collector on behalf of Govt has granted a quarrying lease to the LESSEE Shri M Palanisamy; details of Profit and Loss Account of Shri M Palanisamy/Lessee showing lease rent payable by them ; details of ledger account of Shri M Palanisamy, the lessee; details of Income and Expenditure Statement of Trust showing receipts as RENT; details o....
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....g registered for renting of immovable property services shows their lack of Bonafide. Argument that they believed that the RENTING of Property for a MINING activity is a charitable activity or a Manufacturing activity cannot be termed as a BONAFIDE Belief. Intention is clear from the facts of the case given that the Assessee will use word RENT in various agreements with the LESSEE; Assessee will use word RENT in various documents maintained by them; Assessee will use word RENT in statutory documents submitted before regulatory authorities also BUT the Assessee registered under renting of immovable property services will not use word RENT while filing returns before Service Tax authorities under Heading Renting of Immovable Property Services or any other Taxable Service in Negative List era. In the instant case when the appellant has received additional lease Rent for consideration under a lease agreement; has used the said word RENT in agreements with LESSEE; has used the word RENT in statutory documents submitted before other authorities, has used the word RENT in various documents maintained by them ; there is no scope to conclude that they have not declared such receipts as RENT....
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....tal to its use. E) Section 66E which stipulates what would constitute declared services, has specified under clause (a) "renting of immovable property. F) Rule 5 of the Place of provision of services Rules, 2012, titled "Place of provision of services relating to immovable property", stipulates: "The place of provision of services provided directly in relation to an immovable property, including services provided in this regard by experts and estate agents, provision of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever, name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including architects or interior decorators, shall be the place where the immovable property is located or intended to be located". G) It is also seen that the Mega Exemption Notification Nol.25/2012-ST dated 20-06-2012, at Sl.No.4 stipulates those services by an entity registered under Section 12AA of the Income Tax Act, 1961 by way of charitable activities are exempt from service tax. The definition of "charitable activities" given in paragraph2(k) of the said notification is as under: ....
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....ed over to the appellant. During the above said valid period of lease, Mr. M Palanisamy should not give the land for lease or for rent and if either party wishes to extend the lease duration, with mutual understanding they can extend it under their conditions. The property details of the 22.68 acres of vacant land specifying the survey numbers as situated at paalathurai village, Coimbatore South Taluk is also listed. B. Notarized Agreement dated 29-01-2010 This agreement between the appellant and Mr. M Palanisamy, inter-alia, states the factum of the property as detailed therein having been taken on lease by Mr. M. Palanisamy for five years from 29-01-2010 and the yearly lease amount of Rs.22,680/-. It goes on to state that as there are some sources and assets in the above mentioned property, apart from the above mentioned yearly lease amount to the appellant, Mr. Palanisamy assures that seventy five percent of the receipts will be paid to the appellant every month as additional lease amount. It further states that the above said seventy five percent additional lease amount should be calculated and paid by the end of every six months, failure to do so attracting i....
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....t further states that the above said seventy five percent additional lease amount should be calculated and paid by the end of every six months, failure to do so attracting interest calculated at one percent per month and be paid once in every six months. The agreement provides that if Mr. M. Palanisamy wishes to extend the duration and validity of the lease, it can be informed to the appellant and with the decision from the board of the appellant, it can be extended. The agreement also requires Mr. M. Palanisamy to keep the property without causing any problem and if something goes wrong, Mr. Palanisamy promises to get it cleared at his own risk and cost. E. JOINT AGREEMENT FOR QUARRYING AND CARRYING AWAY MINOR MINERALS BY LESSEES IN RYOTWARI LANDS IN WHICH THE MINERALS BELONG TO GOVERNMENT The title reflects the purpose of the agreement entered into as that for quarrying and carrying away minor minerals by Lessees, which in this case is Mr. M. Palanisamy, and which minerals in such ryotwari lands belong to the Government. The agreement made on 27th July 2010 states that the appellant is the registered holder of the lands described in the schedule and that the app....
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....nt. b) Ledger account of Shri. M Palanisamy/Lessee shows the lease rent for the lands paid to the appellant. c) The Income and Expenditure Statement of the Appellant shows the lease rent received as income under the entry rent received. d) The ledger extract of the ledger account of the Trust has shown under the heading "lease rent (mining land) received from M. Palanisamy" the lease rent for the said vacant lands received from the lessee, paid on various dates. e) The Schedules to the Balance Sheet and Income & Expenditure account of the Appellant, for example, as on 31.03.2014, under heading Schedule 12 titled "Lease Rent received", shows as a separate item entry " Lease Rent (mining land) received from M. Palanisamy". f) TDS Certificate No: 0312DD149B dated 24-Jul-12 issued by Assistant Commissioner of Income Tax, TDS Circle, Coimbatore addressed to MARAPPA GOVNDER PALANISAMY, holder of TAN CMBM04060A, authorizes the lessee to pay or credit Rent upto Rs.150,00,00,000/- (one hundred and fifty crores), after deducting income tax at the rate of 0% to the account of Sree Vijayalakshmi Charitable Trust, PAN AADTS0942A, over whom the said o....
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.... paid in addition to the yearly lease amount. The quantification of the lease amount in terms of the receipts of the lessee, and as seventy five percent of the receipts, cannot and does not divest the said additional lease amount of its intrinsic character of rent, when the said additional lease amount is paid by the lessee to the appellant. Likewise, in respect of the 14.86 acres of vacant land owned by the appellant also, the appellant has leased the said land to the lessee Shri. M. Palanisamy, by way of a registered lease deed dated 19th July 2010, with the lease agreement being valid from 17.05.2010 for a period of five years and a yearly lease amount of Rs.14,8600/- to be paid at the beginning of every year. In respect of this 14.86 acres of land too, the appellant has on 17.05.2010 itself, in the afore narrated manner, entered into a separate notarized agreement, evidencing the meeting of minds between the appellant and Shri. M. Palanisamy that, as there are some sources and assets in the above-mentioned property, apart from the above mentioned yearly lease amount to the appellant, Mr. Palanisamy will be required to pay seventy five percent of the receipts to the appellant ev....
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....e appellant as lessor has leased the vacant lands out to Mr. M. Palanisamy, the lessee, for which the appellant receives a yearly lease amount and an additional lease amount as rent for such leasing of the vacant lands and it is for the lessee to carry out the activity of quarrying rough stone for which purpose it made and obtained permission from the District Collector Coimbatore. It is also evident that it is the lessee's responsibility to keep the property without causing any problem and if something goes wrong, the lessee must get it cleared at his own risk and cost. Further, the joint agreement with the District Collector, the appellant and the lessee also evidences that it is the lessee who has deposited Rs.5000/- as security for the due performance of the agreement or damage which may be incurred and it is the lessee who has to pay the seigniorage fee as specified in Annexure-2 of Tamil Nadu Minor Mineral Rules, 1959 when the permitted stones are cleared from the quarry and the lessee shall also pay according to the changes in the seigniorage fee without any objection. The lessee is also to undertake quarry work in compliance to the above conditions in the contract agreement....
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....aforesaid contentions relied on the following decisions: a) New Horizons Ltd vs Union of India, (1995) 1 SCC 478 (Annexure D) b) Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd., 2008 (12) STR 401 (SC) (Annexure E) c) Commissioner vs. Mormugao Port Trust-2018 (19) GSTL J118 (S.C) (Annexure F) d) ACL Mobile Ltd. vs. CCE, Delhi 2019 (20) GSTL 362 (Tri Del.) (Annexure G) e) B.G. Exploration & Production India Ltd. vs COMMISSIONER OF CGST & CX, NAVI MUMBAI, 2022 (64) G.S.T.L. 578 (Tri. Mumbai) (Annexure I) f) B.G. Exploration & Production India Ltd. vs COMMISSIONER OF CGST & CX, NAVI MUMBAI, 2022 (63) G.S.T.L. 351 (Tri. Mumbai) (Annexure J) g) Commissioner of Service Tax vs Inox Leisure Ltd, 2022 (61) GSTL 342 (SC) (Annexure K) h) Inox Leisure Ltd. vs Commissioner of Service Tax, Hyderabad, 2022 (60) GSTL 326 (Tri.-Hyd.) (Annexure L) i) Sir Ganga Ram Hospital vs Commissioner of Service Tax, New Delhi, 2020 (43) GSTL 390 (Tri.- Del.) (Annexure M) j) Niraj Prasad vs Commissioner of C. Ex. & S.T., Kanpur 2020 (38) GSTL 78 (Tri.-All.) (Annexure N) k) Commr. of S.T., Delhi-III vs Bharuch Dahej R....
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....(Annexure I), the contracts therein were broadly divided into three phases and Enron Oil, Gas India Ltd, RIL and ONGC entered into a joint operating agreement to define their respective rights, duties and obligations with respect to their operations under the contract. In terms of the agreement, liabilities incurred by any holder were required to be borne by all the holders in accordance with the ratio of their performing their obligations. The facts of this case are clearly distinguishable from the facts of the cited case law. Likewise, we also find that not only are the decisions relied on by the appellant in this context distinguishable from the facts and circumstances of this case, but the circular No.109/3/2009-ST dated 23-02-2009 at annexure H of the compilation of case laws and circulars submitted as relied on also, which is on the subject of service tax on movie theatres, has no relevance or applicability in the facts of this case. 27. In as much as the adjudicating authority has categorically controverted the appellant's contentions regarding the plea that the agreements constituted a JV, by detailing the requirements that ought to exist in order to be considered a JV, ....
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....ding that the transaction is that of revenue sharing. From our discussions above, the contention of the appellant that it is a revenue sharing agreement has been shown to be without any basis. Further the contention of the appellant that liability is solely on the nomenclature and accounting treatment is incorrect. Rather the liability has arisen from the nature of transaction as reflected from the agreements entered into by the appellant and Shri. M. Palanisamy being one of the appellant leasing vacant lands to the lessee . What the documents evidence is that, contrary to the stand now taken by the appellant, the contemporaneous records reflect that the appellant itself has characterized the receipts from lessee as "additional lease amount" in the Notarized Agreements. The fact that the appellant has shown the receipts of such additional lease amount received from the lessee as rent in their Balance Sheet and Income and Expenditure statements is evidence enough that at the relevant point in time the appellant too has considered the same as rent receipts. The lessee has also mirrored such understanding by indicating these amounts as rent amounts paid to the appellant in their ledge....
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....with findings of the adjudicating authority which are in consonance with our views stated above. Therefore, this attempt to conflate two transactions and pass it off as a single transaction exigible to VAT, is specious and devoid of merits. We find that the case laws relied upon by the appellant have no application in the aforesaid facts of this case. 30. The contention of the appellant that the receipts from the lessee cannot be characterized as a "consideration" for service also hinges on its contention that it is a revenue sharing agreement that the appellant has entered into with the lessee. For the reasons already elaborated supra, the contention of the appellant that it is a revenue sharing agreement is found to be misconceived and thus the aforesaid contention that the receipts of additional lease amounts, from the lessee cannot be characterized as a consideration too is liable to be dismissed as unacceptable. The case laws relied on in this regard are different from the facts of this case and unlike the said cases, the appellant herein is engaged in the specific activity of renting of immovable property for consideration and thereby there does exist a quid pro quo betwee....
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....y the appellant is an "activity" being carried out by the appellant. Since the appellant is leasing the vacant lands to Mr. Palanisamy, it becomes an activity by the appellant for another person, namely Mr. Palanisamy. Again, by the said activity of leasing of vacant lands the appellant is receiving annual lease amount and additional lease amount in terms of the aforementioned agreements, the said amounts so received are the consideration received by the appellant for such activity of leasing of vacant lands. Therefore, such activity of leasing of vacant lands by the appellant to Mr. Palanisamy, for receipt of annual lease amount and additional lease amount, qualifies as any activity carried out by a person for another for consideration, and thus comes within the ambit of the definition of "service." The vacant lands being immovable property, such leasing of vacant lands by the appellant to Mr. Palanisamy fall more specifically under "renting of immovable property" and is thus a declared service under Section 66E(a). 33. Further, since the negative list of services given in Section 66D (d) (iv), in so far as renting is concerned, lists only services relating to agriculture or ag....
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....t of Tamil Nadu. 35. We find the contention that the transaction is itself outside the service tax net is devoid of merits and that cannot be countenanced as an argument against invoking of extended period of limitation. We are also unable to concur with their contention that there has been no suppression. We find that the appellant is registered for provision of renting of immovable property services as a service tax provider. The appellant is also paying service tax for renting of a Commercial premise, namely, SIV Towers and filing ST3 returns. Thus, the provision of law relating to renting of immovable property is not alien to the appellant. Yet, the appellant has not declared to the Department at any stage about activities related to leasing of vacant land to the lessee Shri. M. Palanisamy and receipt of additional lease amounts which the appellant has also characterized as rent received from the Lessee. The fact of creation of separate set of agreements with Shri M Palanisamy to lease out lands for additional lease rent is a fact that is within the exclusive knowledge of the appellant. The receipt of such lease rent was never disclosed to the Department. Only on a detailed ....
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....x on the lease rent received from commercial property yet it has chosen to suppress the fact of having entered into agreements and the fact of receipt of additional lease amounts from property leased out to Shri M. Palanisamy, with such additional lease amounts being in crores of rupees. Belief, in order to constitute Bonafide belief should have a basis stemming from what an ordinary prudent man would consider to be reasonable. Any belief or blind belief cannot be equated with Bonafide belief. The appellant's contention that the appellant was a manufacturer and Shri. M. Palanisamy was paid labour or that the appellant and Shri. M. Palanisamy had entered into a Joint Venture and that the agreements reflected revenue sharing on a principal-to-principal basis are merely specious arguments sans any basis whatsoever when the very wordings of the document nowhere reflects any reasonable basis for such interpretation. Thus, such contentions belie the plea of Bonafide belief. The indisputable fact is that the appellants are acquainted with the provisions of law relating to renting of immovable property being an assessee registered for providing precisely the said service and therefore cann....
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.... 76 simultaneously, as there are two SCNs spanning two different periods and the separate penalties under Section 78 and Section 76 have been invoked for the different periods. We find that the penalty imposed is within the limits prescribed. The penalty imposed under Section 77(2) of the Finance Act is also commensurate with the violations found. 38. The appellant had in the written submissions taken a plea that in case any deficiency is noticed under income tax it is responsibility of the central excise authorities to bring it the notice of the income tax authorities for remedial action but in this case the deficiency happened under IT Act is being misused to levy the service tax. We find such glib submissions to be disingenuous. The exemption from income tax is allowed only in respect of income from immovable properties and not any business incomes. However, when a transaction, represented as leasing of vacant lands with yearly lease amount and additional lease amount being shown as receipts by the lessor appellant from the lessee and such understanding reflected not only in the agreements executed but also in the manner such income has been characterized and dealt with for a....
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.... any misplaced sympathy. 40. We find that the Department has discharged its onus and has brought home the charges as alleged. We therefore hold that the appellant has provided the taxable service of "renting of immovable property service" in respect of the lands that the appellant has leased out to Shri. M. Palanisamy (lessee) and consequently, the demand of service tax made on the appellant along with applicable interest and penalties as imposed, are tenable in law. 41. We find that the adjudicating authority has passed an elaborate, well-reasoned and fair order. In view of our above discussions and in these facts and circumstances, we find that the impugned order in original warrants no interference at our hand. We uphold the Order-in-Original No. Sl. No. 06-07/2018-COMMR. dated 25.06.2019 in toto. 42. The appeals are dismissed as devoid of merits. 43. Before parting with the order, we are constrained to observe that of late, we have been saddled, mercifully less often than not, with disparate written submissions running into 40-50 odd pages or more, with as many annexures of documents, circulars and case laws, and at times marked as Annexure A to ZZZ and then some mo....