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TMI Blog2017 (5) TMI 1465X X X X Extracts X X X X X X X X Extracts X X X X ..... the category of “renting of immovable property service” for the period upto 30.06.2012 - For the period from 1.7.2012 (Negative List Regime), the appellants are not liable to pay service tax under the said tax entry in respect of shed/shop/premises leased out to the traders/others for storage of agricultural produce in the marketing area. The Negative List will not cover the activities of renting of immovable property for other than agricultural produce - The demands, wherever raised invoking extended period, shall be restricted to the normal period - penalties set aside. The threshold exemption available to the small scale service provider in terms of the applicable notifications during the relevant years, shall be extended to the appellant on verification of their turnover. Appeal allowed - decided partly in favor of appellant. - Service Tax Appeal Nos.59291/2013 - ST/A/53436-53500/2017-CU[DB] - Dated:- 25-5-2017 - Shri S.K. Mohanty, Member (Judicial) And Shri B. Ravichandran, Member (Technical) ST/51115, 52991-52993, 53015, 53726, 54045/2014-CU(DB), ST/50309, 50753, 51859-51860/2015-CU(DB) ST/50416, 50418-50419, 50434-50435, 51180, 51182, 51296, 51311, 51610-5161 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of renting of land/shops for a consideration. Accordingly, service tax demands of varying amounts were confirmed against the appellants in different locations. Penalties under Section 76, 77 and 78 of the Finance Act, 1994 were also imposed on them. The appellants are aggrieved by these orders and filed present appeals against them. 4. Ld. Counsels appearing for the appellants submitted mainly on the following lines:- (a) The show cause notices issued after 1.7.2012 invoking obsolete provisions of law that existed prior to that said date are invalid in law. (b) The appellants are performing mandatory/statutory functions under the Act and are not liable to any service tax in terms of clarification issued by the Board vide Circular dated 18.12.2006. The appellants are a public/sovereign authority discharging statutory functions entrusted to them in terms of Rajasthan Agricultural Produce Markets Act, 1961 and the rules made thereunder. The facilities provided for marketing of agricultural produce as envisaged under Section 9(2) of the Act cannot be subjected to service tax. The appellants are issuing licence under Section 14 of the Act and collected prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nction of the appellant. 6. We have heard both the sides and perused the appeal records. First, we considered the preliminary objection regarding validity of some of the demand notices. The appellants claimed that demand notices issued after 1.7.2012 cannot invoke charging Section 65 or tax entry under Section 65(105)(zzzz) of the Finance Act, 1994. These provisions ceased to exist with effect from 1.7.2012. We note that notification no.20/2012-ST dated 5.6.2012 is very clear. It stated that Section 65 of the Act shall not apply with effect from 1.7.2012 except as respects things done or omitted to be done before the said Section 65 so ceases to apply. Accordingly, in view of this clear saving provision, we find no infirmity in the demands raised after 1.7.2012 for periods prior to that date. Regarding invoking old provisions of Act for periods post 1.7.2012, we note that it is well settled legal principle that mention of incorrect section/Rule will not make the proceedings invalid. The scope of demand along with applicable facts are brought out in the notice. Not mentioning the changed Section by itself will not be fatal to the proceedings. 7. The appellants‟ status as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, no service tax is leviable on such activities 3. However, if such authority performs a service, which is not in the 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 levaible, if the activity undertaken falls within the ambit of a taxable service. 8. We note that the claim of the appellant for exclusion from the service tax liability in terms of the above Circular was examined by the lower authorities. In one of the impugned orders, it is recorded as below:- (i) Services provided by them with a view to regulate agriculture produce market wherein they charge market fee (mandi shulk) for issuing license to wholesale trader cum commission agent, any other buyer of agriculture produce etc. As statutory body the Appellant provide basic facility in the market area out of the market fee collected from licensee, mainly to facilitate the farmers, purchasers and others. This activity of the appellant is not taxable as clarified under CBEC circular 89/7/2006-ST dated 18.12.2006 read with CBEC Circular No.157/8/2012-ST dated 27.04.2012. (ii) The appellant have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.e.f. 1.7.2012, the appellants‟ services were excluded from the tax liability. The provisions of Section 60(D) are as below:- 66D. The negative list shall comprise of the following services, namely: (a) services by Government or a local authority excluding the following services to the extent they are not covered elsewhere- (i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers; or (iv) 5[any service] other than services covered under clauses (i) to (iii) above, provided to business entities; (b) services by the Reserve Bank of India; (c) services by a foreign diplomatic mission located in India; (d) services relating to agriculture or agricultural produce by way of- (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or 2 [***] testing; (ii) supply of farm labour; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below the minimum support price. APMCs collect market fees, license fees, rents etc. Services provided by such Agricultural Produce Marketing Committee or Board are covered in the negative list. However any service provided by such bodies which is not directly related to agriculture or agricultural produce will be liable to tax e.g. renting of shops or other property. 12. Accordingly, we hold that the appellants are not liable to service tax on renting of immovable property used for storage of agricultural produce in the market area. In this connection, we refer to para 161 and 162 of the Budget Speech of the Hon'ble Finance Minister while introducing Budget 2012-2013. The same is extracted as below:- 161. The important inclusions in the negative list comprise all services provided by the government or local authorities, except a few specified services where they compete with private sector. The list also includes pre-school and school education, recognized education at higher levels and approved vocational education, renting of residential dwellings, entertainment and amusement services and a large part of public transportation including inland waterways, urban railways ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter V of Finance Act, 1994 or rules made thereunder with intent to evade payment of service tax by the person chargeable with service tax. If any one of the ingredients are present, then the demand for not paid or short paid service tax can be made invoking extended period of limitation of 5 years, from the relevant date. Admittedly, the appellants are a Government Organisation; their functions are regulated by the said enactment and the rules. In such situation, it is clear that there will be a rebuttable presumption regarding non-existence of any of these ingredients on the part of the appellant. We have perused the reasons recorded by the lower authorities to sustain the demand for longer period. We are not convinced with the findings as there is no evidence of the appellants‟ malafide act to evade service tax liability by resorting to conduct, which will attract any of the serious allegation listed in the proviso to Section 73(1) of the Act. 17. We also note that the tax entry renting of immovable property service itself was subject matter of serious litigation in various judicial forum. In fact, the Hon'ble Delhi High Court in the case of Home Solutions Ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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