TaxTMI 
TaxTMI 
2026 (6) TMI 707
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....incipal Commissioner of Service Tax - I, Chennai i (impugned order). Factual Matrix 2. Brief facts of the case are that the appellant is engaged in establishing, developing, maintaining and managing industrial complexes at various placed in the State of Tamil Nadu. The appellant leases land to industries for 99 years. At the time of execution of the lease, each allottee must also enter into a water supply agreement and pay a one-time upfront charge equal to 50% of the capital cost of the water supply infrastructure. The appellant bears the remaining 50%. In addition, the allottee pays annual water charges based on actual consumption. The appellant treated the 'development charges' and upfront water-related infrastructure charges as "C....
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....ing water infrastructure facilities. This is separate from the periodic water charges, which the allottees have to pay and are levied based on actual consumption in KL. B. The agreement expressly distinguishes the upfront capital cost of water supply from water charges based on consumption. Accordingly, Revenue's conclusion that the 50% capital cost is determined by KL of water supplied is misconceived, and the resulting demand is legally unsustainable. C. Revenue's reliance on Jaisu Dredging & Shipping v. Commissioner of Central Excise, Rajkot [2013 (32) S.T.R. 107 (Tri.-Ahmd.)] to characterize SIPCOT's activity as "infrastructural support" is misplaced. That decision concerned the levy of service tax on the supply of bun....
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....extended to the period October 2014 to September 2015. The impugned order denying exemption under Section 104 is therefore without merit and liable to be set aside. In view of the above submissions, he prayed that the impugned Order-in-Original dated 31.03.2017 be set aside and their appeal allowed. Submissions made by the Respondent-Revenue 3.2 Smt. G. Krupa, Ld. Authorized Representative submitted on behalf of Revenue that: A. Under the lease deed, the allotee industrial unit must enter into a separate agreement for water supply upon taking possession of the land, with the appellant. Before execution of that agreement, the allotee-lessee is required to pay the amount demanded by the Appellant toward the capital cost of t....
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....121-40126/2018 dated 16.01.2018 by remanding the matter to the Lower Authority. 4.3 We further find that the issue of exigibility of '50% of Capital Cost for water supply' has subsequently been examined by the Principal Commissioner of CGST and Central Excise vide Order 50 to 56/2021 CH.N.GST dated 24.12.2021, which has also taken into consideration earlier SCN no 36/2014 dated 12.11.2014, in terms of the remand made by this Tribunal. 4.4 The present appeal can be disposed of in terms of the said Order dated 24.12.2021, as it has dropped the Service Tax demand on '50% of Capital Cost for water supply' and no appeal against the same has been brought to our notice by the parties to this dispute. 4.5 Para 10 and 11 of the said Order d....
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....r, 2016 (both days inclusive). 12. From the above provisions it is clear that no service tax is leviable on one-time upfront amount, by whatever name called, in respect of taxable services provided or agreed to be provided by a State Government Industrial Development Corporation or undertaking to industrial units by way of grant of long-term lease of thirty years or more for industrial plots for the period from 01.06.2007 to 21.09.2016. It is seen that the period involved in these cases span from October 2005 to June 2012. The Noticee in the instant case would become eligible for the exemption for such services provided by them for the period from June 2007 onwards, only if the amount received by them for such services is an one ti....