TaxTMI 
TaxTMI 
2025 (11) TMI 946
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....ziabad under the provisions of section 73 of the Finance Act, 1994. 2) I confirm and order for recovery of interest at the applicable rates on the amount of service tax mentioned at (1) above, under the provisions of Section 75 of the Finance Act, 1994 from M/s Ghaziabad Development Authority, Vikas Bhavan, Ghaziabad. 3) I impose a penalty of Rs. 13,35,389/- (Rupees Thirteen Lakh Thirty Five Thousand Three Hundred and Eighty Nine only) upon M/s Ghaziabad Development Authority, Vikas Bhavan, Ghaziabad under the provisions of section 76 of the Finance Act, 1994; 4) I impose penalty of Rs. 10.000/- (Rupees Ten Thousand only under Section 77 (life) of the Finance Act, 1994 upon them for their failure to appear before the Officer during enquiry; 5) I confirm late fee amounting to Rs. 4000/- for late filing ST-3 returns under Section 70 of the Finance Act, 1994 read with Rule 7C of the Service Tax Rules, 1994. 1.2 By the impugned order the Order-In-Original No.08/ADC/ST/GZB/2018-19 dated 30.10.2018 holding as above has been set aside and the matter was remanded to the Original Authority for redetermination of the issue in light of the observation ma....
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....5- 14th Nov 15 4017797 6559774 0 8439928 19017499 14 2662450 15th Nov 15 -Mar 16 2637702 6422950 9803992 4649949 23510193 14.5 3408978 Apr 16 May 16 1128613 5283183 0 598347 6920143 14.5 1003421 Jun 16 -Nov 16 2974120 23260876 4263826 4656676 37155498 15 5573325 Total 14123692 43084951 15210501 19893928 92313072 - 13353897 2.5 The Show Cause Notice dated 19.04.2018 has been issued to the Appellant asking them to show cause as to why:- 1) Service Tax including Cess amounting to Rs. 1,33,53,897/- (Rupees Ons Crore Thirty Three Lakhs Fifty Three Thousand Eight Hundred Ninety Seven Only) not paid during the period from April, 2015 to November, 2016 against provision of taxable service in relation to Renting of Immovable Property should not be demanded and recovered from them under Section 73(1) of the Finance Act, 1994; 2) Interest at the appropriate rate should not be charged and recovered from them under Se....
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....one through the facts and records of the case as well as the submissions made by the appellant. I find that during the period under dispute, the renting of mmovable property (RIP) was covered under Section 66E (a) of the Act by virtue of Section 65B (44). However, any activity constituting merely transfer of title of immovable property, in any manner, was excluded from the purview of the term "service". I find that the appellant has contended that the commercial lump sum lease rent received against the vacant plot was not chargeable to service tax as the same was nothing but a premium amount received against the land which has been held not taxable by the Hon'ble Tribunal in the case of Greater Noida Industrial Development Authority vs CCE & ST Noida [2015 (38) STR 1062 ( The Delif duty upheld by the Han ble High Court at Allahabad. I find that the appellant vide his Letter dated 30.12.2019 submitted details of lease rent received during the year 2015-16 and 2016-17 along with copy of registries/ receipts evidencing receipt of lease rent. On perusal of the same find that the appellant, during the said period received the amounts for the various customers to whom the land was al....
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....IP but the same was for the transfer of the title of property on free hold basis, in fact there was no element of service in the said transaction. Therefore, this amount is not includable in the taxable amount. Regarding rent received from educational body, I find mat w.e.f. 11.07.2014 the exemption available to the renting of immovable properly to an educational institution was withdrawn vide Notification No. 6/2014-ST dated 11.07.2014, therefore, the property leased to educational institution by the appellant was chargeable to Service Tax w.e.f. 11.07.2014. Similarly lease rent received against the renting of land for the purpose of parking was exempted up to 31.03.2013 in terms of clause 24 of the Notification No 25/2012-ST dated 20.06.2012. This exemption had been withdrawn vide Notification No. 3/2013-ST dated 01.03.3013 with effect from 01.04.2013. Therefore, during the entire period of demand from April-15 to November15, the appellant was liable to pay service tax on the said receipts The appellant, during the personal hearing also contended that service tax on ark entry fee and parking fee was not payable as being a government authority, he was exempt from service tax as th....
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....t. I find that the adjudicating authority in para 19 of the impugned order has observed that the appellant had neither given the details of the specific amount of service tax deposited against these services (renting of immovable property) nor had anywhere tendered the relevant TR-6 Challans, in this regard. Under the circumstances, the adjudicating authority is directed to ascertain the factual position regarding payment of service tax and re-adjudicate the demand accordingly. 6.3 The appellant has further contended that the service tax has been calculated incorrectly as the amounts received by him are inclusive of service tax. in this regard I find that the appellant was an entity created by the Government of UP, under the Urban Planning and Development Act 1973, for carrying out the activities related to preparation of master plan for Ghaziabad and its implementation, development, control and construction of housing and urban infrastructure and other similar activity under the control of Government of UP. There can, therefore, be no intent to evade as the appellant was not doing the said activities for profit as an individual. Under the circumstances, the appellant is e....
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....vailable in case of the appellant." 4.2 We find that the Appellant have challenged the findings recorded in respect of the lease rent received in respect of renting of the properties by relying upon the decision of the Tribunal in the case of Greater Noida Industrial Development Authority V/s C.C.E. & S.T., Noida 2015 (38) S.T.R. 1062 affirmed by the Hon'ble Allahabad High Court in Commissioner of Service Tax, Noida V/s Greater Noida Development Authority 2015 (40) S.T.R. 46. 4.3 It is the submission of the Appellant that lease rent was collected in lump sum amount is premium/ salami for transfer of interest lease to assessee. Thus this activity should not be taxable. 4.4 We do not find any merits in the said submission made by the Appellant. The issue under consideration in the above two decisions was for the period prior to amendment made in the Finance Act, 1994 by the Finance Act, 2010 w.e.f 1st July, 2010. Hon'ble Allahabad High Court in the case of Commissioner of Service Tax, Noida V/s Greater Noida Development Authority reported in 2015 (40) S.T.R. 46 (All.) has held as under:- "12. The Tribunal under the order impugned dated 28th August, 2014 has confirme....
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.... argued before us by the counsel for the department is that the renting of vacant land was under the ambit of Service tax w.e.f. 1st June, 2007 in view of Section 65(105)(zzzz) of the Finance Act, 1994 and for the purpose reference is made to the said section, which reads as follows :- "Section 65(105) "taxable service" means any service provided or to be provided,- *********** (zzzz) to any person, by any other person in relation to renting of immovable property for use in the curse or furtherance of business or commerce." 17. It is his case that the amendment carried out under the Finance Act of 2010 was only clarificatory in nature and vacant land other than that used for the agriculture, aquaculture, farming, forestry, animal husbandry, mining purpose was clearly defined to be under the purview of the Service tax for the purposes of levy. The insertion of clause (v) under the Finance Act of 2010 w.e.f. 1st July, 2010 did not alter the taxable event of letting of the vacant land on lease or license for business/commerce purpose. 18. The Tribunal has recorded a specific finding that prior to the introduction of new clause on 1st July, ....
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....f the Finance Act, 1994; to modify the scope of certain taxable services including the taxable service defined and enumerated in Section 65(105)(zzzz), of the Act. These several contemporaneous exposition and administrative constructions and the scope of sub-clause (v) of Explanation I in Section 65(105)(zzzz) fortify the conclusion the scope of sub-clause (v). To modify and expand the scope of the taxable service to cover and include vacant land on lease or licence for construction of a building or a temporary construction at a later stage to be used for furtherance of business or commerce, within the ambit of 'immovable property' is thus the taxable service. Since the introduction of this sub-clause in Explanation I expands the scope of the taxable service and renders the taxable (a) hitherto non-taxable transaction, and absent of explicit retrospective reach provided to the amendment and insertion of this sub-clause, these transactions covered by this sub-clause of the Explanation have only the prospective operation. 15. On the above analysis, renting of vacant land by way of lease or licence (irrespective of the duration or tenure), for construction of a building or a ....
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....eriod after 01.07.2012 in this case Larger Bench has in the above order observed follows:- From 01.07.2012 41. The period involved in the appeal filed by RIICO is from 01.10.2014 to 30.06.2015. 42. Section 65B was inserted in the Finance Act by the Finance Act 2012 w.e.f. 01.07.2012. "Service" has been defined under section 65B(44) of the Finance Act to mean any activity carried out by a person for another for consideration, and includes a declared service, but will not include an activity which constitutes merely a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of article 366 (29A) of the Constitution; or a transaction in money or actionable claim. 43. Section 66B of the Finance Act deals with charge of service tax on and after the Finance Act 2012. It provides that there shall be levied a service tax at the rate of fourteen percent on the value of all services, other than those service specified in the negative list. Section 66D of the Finance Act deals with negative list of services. Section 66E of the Fin....
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.... property. The lessor, who owns and possesses the property transfers the possession to another for a price. There can, therefore, be no doubts that "premium" is the amount received for "renting" of immovable property. 48. This apart, section 65B (44) of the Finance Act defines "service" to mean any activity carried out by a person for another for consideration, and includes a "declared service". It is seen that consideration is received in the form of premium which would be included in the definition of "renting". "Renting of immovable property" is a "declared service" under section 66E of the Finance Act. Once "renting of immovable property" is a declared service and so taxable under section 66B of the Finance Act, it cannot be contended by the appellant that it will also be included in those services which are excluded under section 65B (44) of the Finance Act, for it can never be the intention of the legislature to include a "service" as exigible to service tax and at the same time also exclude that "service" from taxability. The contention of the appellant that it is excluded from taxability under sub-clause (a)(i) of section 65B(44) of the Finance Act cannot also be a....
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....under a statute can be considered as 'provision of service' for the purpose of levy of service tax. The issue has been examined. The Board is of the view that the 2. activities performed by the sovereign/public authorities under the provision of law are in the nature of statutory obligations which are to be fulfilled in accordance with law. The fee collected by them for performing such activities is in the nature of compulsory levy as per the provision of the relevant statute, and it is deposited into the Government treasury. Such activity is purely in public interest and it is undertaken as mandatory and statutory function. These are not in the nature of service to any particular individual for any consideration. Therefore, such an activity performed by a sovereign/ public authority under the provisions of law does not constitute 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 the 3. nature of statutory activity and the same is undertaken for consideration not in the nature of statutory fee/levy, then in such cases, service tax would be leviable,....
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....results in absurdity, which is so not found in the present case. 8.4 Now, so far as the submission on behalf of the respondent that in the event of ambiguity in a provision in a fiscal statute, a construction favourable to the assessee should be adopted is concerned, the said principle shall not be applicable to construction of an exemption notification, when it is clear and not ambiguous. Thus, it will be for the assessee to show that he comes within the purview of the notification. Eligibility clause, it is well settled, in relation to exemption notification must be given effect to as per the language and not to expand its scope deviating from its language. Thus, there is a vast difference and distinction between a charging provision in a fiscal statute and an exemption notification. 9. In the present case, it is the case on behalf of the appellants that the activity of rent/lease/allotment of shop/land/platform/space is a statutory activity and the Market Committees are performing their statutory duties cast upon them under Section 9 of the Act, 1961 and therefore they are exempted from payment of service tax on such activities. The aforesaid submissio....
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....t in such treasury or sub-treasury or bank and it shall not be withdrawn upon except in accordance with these rules." 10.1 Now, so far as the submission on behalf of the appellants relying upon Rule 45 of the Rules, 1963 that the fees, which is collected shall be deposited with the Government Treasury and therefore also the Market Committees are exempted from payment of service tax is concerned, it is to be noted that on fair reading of Rule 45, the amount of fee so collected on such activities - rent/lease shall not go to the Government. Rule 45 provides how the money received by the Market Committees shall be invested and/or deposited. It provides that all money received by the Market Committee shall be credited to the fund called the Market Committee Fund. It further provides that all money paid into the Market Committee Fund shall be credited once a week in full into Government Treasury or sub-treasury, or a bank duly approved for this purpose by the Director and all balance from the fund shall be kept in such treasury or sub-treasury or bank and it shall not be withdrawn except in accordance with the Rules. Therefore, it does not provide that on deposit of the money r....
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.... fee), then in such cases, Service Tax would be leviable as long as the activity undertaken falls within the scope of a taxable service as defined. 34. Letting of immovable property for consideration, which is determined on the basis of offers received from public at large by the assessee Greater Noida Industrial Development Authority is a service provided for consideration and not on payment of statutory fees, neither it is a statutory service performed by the assessee. It may be that the statute permits such activities of letting out of immovable property for augmenting its finances but the same cannot be termed as the service in public interest nor it is a mandatory or statutory functions of the Development Authority. Accordingly such activity of leasing do constitute a taxable service, in our opinion." 4.10 In case of Ahluwalia Contracts (I) Ltd. [2015 (38) S.T.R. 38 (Tri. - Del.)] following was observed: "6. As regards the contentions of the appellants that the flats made for Delhi Development Authority (DDA) were to be treated as meant for DDA's personal use, this contention is totally untenable because these flats were allotted to individuals and not mea....
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....ted. ........................................ (vi) entry 24 shall be omitted. Further the taxability on receipt of park entry fee may be bifurcated into two periods which is discussed as under Position from 01/07/2012 to 31/05/2015: From in July 2012 on introduction of the negative list-based taxation regime. all services become tanxable except few identified under negative list as clearly defined under Section 660 of Finance Act, 1994. As per the Section 660) (Negative List of Services) of Finance Act, 1994 "admission to entertainment event or access to amusement facilities shall not be considered as Services. Thus, the amount paid for getting an access to amusement park/facilities were not attracting Service Tax by way of inclusion in Negative by Government. Position from 01/06/2015 :- Clause (1) of Section 66D of Finance Act, 1994 has been omitted by the Finance Acı, 2015 and the activity of access to amusement facility becomes a taxable service with effect from 01.06.2015 vide Notification No. 14/2015-ST dated 19.05 2015. Thus, the receipt towards "admission to entertainment event or access to amusemen....
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.............. 9. Services provided to or by an educational institution in respect of education exempted from service tax, by way of,- (a) auxiliary educational services; or (b) renting of immovable property: In the regard, I find that Mega Exemption List of Services was amended to notification no. 06/2014-ST dated 11.07.2014, and the sand exemption from the services of renting of immovable property. provided to an educational institution was withdrawn vide par 18), the relevant part of the notification No. 06/2014 is being given as under:- In exercise of the powers conferred by sub-section (1) of Section 93 of the Finance Act 1994 132 of 1994), the Central Government, being satisfied that it is In exercise of the powers conferred by sub-section (1) of section 93 of the necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.25/2012-Service Tax, dated the 20th June. 2012, published in the Gazette of India, Extraordinary, Part II, Section 3. Subsection . vide number G.S.R. 467 (E), dated the 20th June, 2012, n....