2019 (5) TMI 144 - AT - Service Tax

Maintainability of appeal - whether an appeal can be entertained by the Tribunal in respect of an order-in-revision issued by the Commissioner under section 84 as it stood prior to 2009 where the order was issued after this date? - HELD THAT - In the absence of any saving clause in section 86 is concerned, this issue has been settled by the Tribunal Bangalore in the case of M/S TA PAI MANAGEMENT INSTITUTE OTHERS VERSUS CCE. MANGALORE 2012 (8) TMI 498 - CESTAT, BANGALORE wherein it has been held that notwithstanding lack of any specific provisions saving the right to appeal against the Order-in-Revision after 19-08-2009, in view of Section 6 of the General Clauses Act 1897, CESTAT can decide such appeals. Valuation - Clearing and forwarding agency services - inclusion of rent amount - whether in cases where the assessee providing Clearing Forwarding Agent services enters into two agreements one for renting the godown/warehouse and another for rendering the Clearing Forwarding Agent services, the rental amount is includable in the value of taxable services rendered or otherwise? - HELD THAT - In this case, for the service of Clearing Forwarding Agency, they are charging an amount on which they are already discharging the service tax. There is no specific provision under which the rent on immovable property leased out to the companies providing C F services can also be charged to service tax. In the absence of any legal provision, the liability cannot be passed on the appellant. On an identical case, in the case of SWAMY SONS (AGENCIES) VERSUS CCE, C ST, HYDERABAD-III 2019 (3) TMI 245 - CESTAT HYDERABAD , this Bench held that rental income earned by the assessee cannot be included in the value of Clearing Forwarding Agent services and the judgment of Hon ble Apex Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. 2018 (3) TMI 357 - SUPREME COURT OF INDIA . Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellant is liable to pay service tax on rental income received for warehousing and storage of goods in addition to commission as a Clearing and Forwarding Agent.
2. Whether an appeal can be entertained by the Tribunal against an Order-in-Revision issued by the Commissioner post-19-08-2009 in the absence of a specific savings clause in section 86.

Issue 1:

The appellant, engaged in Clearing and Forwarding Agent services, received rental income for warehousing and storage of goods in addition to commission. The Revenue demanded service tax on the rental amounts collected, which the appellant disputed. The Commissioner held that the rental income was part of the Clearing and Forwarding Agent services provided by the appellant to a specific client, thus liable for service tax. The appellant argued that renting of immovable property was not taxable during the relevant period and the rental income should not be taxed. The Tribunal examined whether the rental amount should be included in the value of taxable services rendered. It was concluded that the renting of immovable property was not a taxable service during that period, and as the appellant was already discharging service tax on the commission received for Clearing and Forwarding services, the rental income need not be taxed. Referring to a similar case, the Tribunal allowed the appeal, setting aside the Commissioner's order.

Issue 2:

The second issue revolved around the Tribunal's authority to entertain an appeal against an Order-in-Revision issued by the Commissioner post-19-08-2009 without a specific savings clause in section 86. The Tribunal, relying on the General Clauses Act 1897, held that it could decide such appeals even in the absence of an explicit provision. This issue was previously addressed by the Tribunal Bangalore, establishing that CESTAT can entertain appeals against Orders-in-Revision passed by the Commissioner after 19-08-2009, despite the absence of a saving clause in section 86.

In conclusion, the Tribunal allowed the appeal, setting aside the Commissioner's order regarding the liability of the appellant to pay service tax on rental income received for warehousing and storage of goods. Additionally, the Tribunal confirmed its authority to entertain appeals against Orders-in-Revision issued by the Commissioner post-19-08-2009, in the absence of a specific savings clause.