TaxTMI 
TaxTMI 
2025 (8) TMI 5
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....ssessee for rendering services under under Chapter V of the Finance Act, 1994. The appellant was regular in payment of service tax and furnishing returns. 2.1. On the basis of audit conducted on the books of accounts of the appellant, a Show Cause Notice dated 18-10-2016 was issued to the appellant demanding Service Tax of Rs. 5,58,73,725/- for the period 2011-12- 2014-15 by invoking extended period of limitation. The said Notice was adjudicated vide the impugned Order in Original dated 22-02- 2017, wherein the demand of service tax made in the Notice has been confirmed along with interest and equal amount of tax as penalty under Section 78 of the Finance Act,1994. A penalty of Rs.1,00,000/- was also imposed under Section 78A of the Finance Act on the Manager (Accounts) of the appellant Company. Aggrieved against the confirmation of service tax along with interest and penalty, the appellant company and the Manager (Accounts) have filed these appeals. 3. The Summary of the demand under challenge in the impugned order are as under : Sl. No. Period Demand Issue 1 July,12 to March,2014 Rs.2,677/- Under reverse charge basis on the amount reimbursement of ex....
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....ter consumption charge and diesel generating charge, the appellant submits that Service Tax is not payable on reimbursement of electricity charges etc. The appellant states that they have collected the actual amount on the basis of consumption. In support of this claim, the appellant submitted a Chartered Accountant's Certificate and ledger account, payment particulars from which it can be seen that the amount paid to the WBSEDCL is more than what is collected. The appellant submits that the issue is squarely covered by the decision of this Tribunal in their own group companies appeals, in Forum Mall Management Services Pvt Ltd VS. Commissioner of Service Tax, vide Final Order No. 77044-77045/2024, dated 23-09-2024. The same view has been taken in the decision rendered vide Final Order No.76299/2024, dated 10-07-2024 in the case of M/s.Choicest Enterprises limited Vs. Commissioner of Service Tax, Kolkata. Accordingly, the appellant submits that the demand of service tax confirmed on this count is not sustainable. 3.4. Regarding the demand of Service Tax of Rs.90,48,885/-confirmed in the impugned order, the appellant states that the said consideration has been received against tr....
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....le as credit to the appellant on the same day itself. We agree with the submission of the appellant. Further, we observe that the demand in this case has been made by invoking the larger period. In the instant case, we find that there is no element of fraud, collusion or suppression of facts is present. We find that the appellant has been filing returns regularly and disclosed all information in the returns filed. Therefore, we hold that invocation of the larger period is not applicable in this case. In support of this view, we rely on the decision of the Hon'ble Apex Court in the case of Jet Airways (India) Ltd. Versus Commissioner - 2017 (7) G.S.T.L. J35(S.C.). Thus, we hold that the demand confirmed on this count is not sustainable and hence we set aside the same. 7. Regarding the demand of service tax of Rs.1,03,652/- under reverse charge basis, we observe that the service provider has charged, collected and paid Service Tax. Therefore, the demand of service tax on the same service again would tantamount to double taxation. In support of this view, we rely on the decision in the case of SHREE SAIBABA CHEMICALS INDUSTRIES VS. COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, ....
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.... the Lease Agreements, the tenants have to pay electricity charges directly to the MSEB and the appellants are also providing electricity through generator set in case there is a power failure and the appellants are charging for the same. We find that electricity is specifically covered under Tariff Heading27 of the Central Excise Tariff Act. We find that as per the provisions of Maharashtra Value Added Tax Act, 2002, electricity is also covered under Schedule A sl.no.20 and charged to Nil rate of tax. In view of this, we find the electricity is goods chargeable to duty under Central Excise Tariff as well as under the Maharashtra Value Added Tax Act, 2002. Therefore, the supply of electricity to tenant amounts to sale of goods and not supply of service. Further the Notification No.12/03 ST dated 20/6/2003exempt from service tax, any value of goods supplied by service provider to service recipient. Further we find that the Commissioner of Central Excise Pune. III vide Order- in-Original dated 28.11.2011 relied upon by the appellants dropped the proceedings which were initiated on the same ground in the case of M/s. Panchshil Tech Park Ltd. The Commissioner of Central Excise in the a....
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....nt reproduced above, we find that that the clauses of the agreement clearly indicate that the said agreements were not for 'renting' but for outright transfer of the property. In this regard, we observe that the permanent assignment of commercial space together with proportionate right on leasehold land cannot be called as 'lease' and hence it would not fall under the definition of taxable service as defined under Section 65(105)(zzzz) of the Finance Act, 1994. 9.2. We find that the issue involved in this case is squarely covered by the decision of this Bench in the case of LUXMI TOWNSHIP LTD. Versus COMMISSIONER OF CGST & C. EX., SILIGURI, 2023 (79) G.S.T.L. 232 (Tri. - Kolkata) / (2023) 11 Centax 238 (Tri. - Kolkata). 9.3. We also find that the decision of this Tribunal in the case of SAFARI RETREATS PVT. LTD. VS. PRINCIPAL COMMISSIONER OF G.S.T. AND C.EX. BHUBANESWAR, (2025) 26 Centax 53 (Tri. -Cal) is squarely applicable to the facts and circumstances of this case. The relevant part of the said decision is reproduced below:- 10. Section 54 of the Transfer of Property of Act, 1882, reads as under: 'Sale' is a transfer of ownership in excha....
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....the benefits under the lease are called rents or royalties." 10.2.2. As per this judgment, in case of Renting or Leasing, the Lessee makes periodical payments for the continuous enjoyment of the benefits under the lease. When such payments are not made on periodical basis, the amount paid cannot be equated to 'Rent'. 10.3. The Hon'ble Apex court in the case of Commissioner of Income Tax v. The Panbari Tea Co. Ltd. [[1965] 57 ITR 422 (SC) ], had the occasion to differentiate between the 'Premium' and 'Rent'. The relevant portion of this decision is extracted below:- "Under section 105 of the Transfer of Property Act, a lease of immovable property is a transfer of a right to enjoy the property made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service....
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....to assume that the parties camouflaged their real intention and fixed a part of the rent in the shape of premium. The mere fact that the premium was made payable in instalments cannot obviously be decisive of the question, for that might have been to accommodate the lessee." 10.3.1. This judgement clarifies that while the Premium or Salami is a one-time payment, the 'rent is payable at regular intervals. It also recognizes that in trade and commerce practice of payments on account of premium and rent exists. 10.4. The issue as to whether the Service Tax is payable on One time premium' in case of long term leasing, was before the Tribunal in the case of Greater Noida Industrial Development Authority v. Commissioner of Central Excise and Service Tax, Noida 102015 (38) S.T.R. 1062 (Tri-Del)). The relevant extracts are reproduced below :- "10. Whether the Service Tax is chargeable only on the lease rent or also on one time premium amount charged in respect of long term leases? 10.1 A lease is a transaction, which has to be supported by consideration. The consideration may be either premium or rent or both. The consideration which is paid peri....
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....oner of Service Tax - I vide Final Order No. 77501 of 2024 dated 14.11.2024 in Service Tax Appeal No. 76203 of 2016, wherein it has been held as under: - "2. Brief facts of the case are that the appellant had entered into an agreement with Kolkata Municipal Corporation (KMC in short) to develop and maintain 8-acres of land. As per the lease agreement with KMC, appellant is entitled to all the construction / erection / structure of any nature whatsoever as the absolute owner thereof and to enter into agreement for transfer of its leasehold rights together with the constructed areas belonging to it. Accordingly, the appellant sub-leased the properties to various parties. In respect of the land to be mutated by the sub-lessee in their name, the sub-lessee is deemed to be the lessee of the said plot and has to apply to KMC for renewal of lease after expiry of the 99 years lease period. After mutation, the full rights and title goes in favour of the sub-lessee, subject to renewal of the original deed after its expiry. Therefore, the appellant treated the said transaction as 'sale of leasehold rights' and not paid service tax on the outright transfer of lease hold rights....