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TMI Blog2019 (1) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant. It was further gathered that CNG was sold by M/s IGL through mother stations installed by IGL in the premises of various bus depots of appellant. It was the department's contention that the appellant have entered into two agreements dated 24/01/2005 and 24/12/2008 with M/s IGL for supply of Compressed Natural Gas which are required as fuel for fleet of appellant's buses. As per the above-mentioned two agreements which has been agreed between the appellant and M/s IGL that a discount of Rs. 1.20 per kg. will be given from the prevailing CNG prices to the appellant and in lieu of that the appellants are going to provide following facilities/properties to M/s IGL (i) providing space/immovable property for installation of dispensing units in the premises of DTC bus depots; (ii) providing space in DTC bus depot premises for setting up of gas compressors and storage cascade; (iii) providing water, electricity, other utilities facilities required for manufacture and supply of CNG at site. It has been the contention of the department that the appellant have been recovering the rent of their immovable property which have been provided by them to M/s IGL in the form of getting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (the buyer) for sale of CNG And whereas the buyer has represented to the seller that they have necessary infrastructure, resources and are desirous of procuring CNG in accordance with the terms hereof, ARTICLE - 4: DELIVERY AND PRESSURE OF GAS 4.05 Buyer shall provide space depending upon compression capacity at depots sites for setting up foundations sheds chain link fencing or RCC wall and other Civil/electrical/mechanical works at the site as per operational statutory requirements and Explosives approval for setting up of Gas Compressors, storage and dispensing facilities. 4.06 Buyer shall provide desired electricity, water and other utilities up to CNG equipments required for manufacture and supply of CNG at the site. However, in the event of power breakdown provision of standby power shall not be the responsibility of the buyer. 4.15 The CNG equipment installed at the premises shall be under the ownership of the seller and shall be operated and maintained by the seller. The seller and its authorized agents shall have unrestricted access to the CNG facilities inside DTC depots. ARTICLE - 10: MINIMUM GUARANTEED OFF TAKE, BILLING BULK DISCOUNT & PAYMENT 10.01 The disco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for, setting.. up of Gas, Compressors, storage and dispensing facilities. 4.06 BUYER shall provide 'desired electricity' up to CNG equipments required for manufacture and supply of CNG at the site. ARTICLE - 10: MINIMUM GUARANTEED OFF TAKE, BILLING, DISCOUNT AND PAYMENT 10.01 IGL (THE SELLER) will give a Bulk Discount of Rs.0.85 per KG to DTC (THE BUYER) in lieu of the bulk quantity of CNG purchased by DTC from the date of signing of the agreement. 10.02 IGL (THE SELLER) will also give a discount Rs.0.40 per Kg (Rs.030 per Kg for Land Rentals and Rs. 0.10 per Kg. for Electricity) of CNG sold for the various facilities provided by the DTC to IGL in its Depots as mentioned in the agreement. The rentals will be increased annually as per a DDA norm which is 6% p.a." 5. From the perusal of the above agreements it is very clear that while providing the space and other facilities at various DTC bus depots for setting up of CNG dispensation units to M/s IGL the appellant have received a discount of Rs. 1.20 per kg. of CNG. Before further analyzing the relevance of discount towards the rental payments of the space provided by the appellant to M/s IGL it will be appropriate to have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities. Explanation 2. For the purposes of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for residential or any other purposes shall be deemed to be immovable property for use in the course or furtherance of business or commerce;" 6. From the above it can easily be seen that the appellant have let out a part of bus depot premises to M/s IGL for purpose of furtherance of business and commerce. As it is an admitted fact that M/s IGL is a business concerned engaged in the business of purchase and sale of Compressed Natural Gas on profit basis. The above-mentioned agreements between the appellant and IGL categorically mentions that discount which is given by M/s IGL to the appellant on the sale of CNG to them from the prevailing market prices is primarily in lieu of the space and logistic infrastructure provided by the appellant to M/s IGL. 7. The provisions of Section 67 of the Finance Act, 1994 are reproduced here below for the sake of convenience to consider whether the payment in the form of discount gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, deduction from account and any form of payment by issue of credit notes or debit notes and [book adjustment, and any amount credited or debited, as the case may be, to any account, whether called "Suspense account" or by any other name, in the books of account of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise.]]" 8. It can be seen that as per the provision of Section 67 (3) the gross amount charged for the taxable service shall include any amount received towards taxable service before during or after provision of such service. We are of the view that the amount of the discount received by the appellant is, in a way payment of rent for renting of immovable property in the form of space provided by them in their Bus depot to M/s IGL, that is to say the use of the space by M/s IGL and thus as per the provision of Section 67 the amount of discount need to be considered as a consideration for providing the service of renting out of the immovable property. 9. In view of above, we hold that the order-in-original is legally correct in holding that providing the space for setting up of dispensation units at DTC Bus depot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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