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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 ..... 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 - 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. The order-in-original is legally correct in holding that providing the space for setting up of dispensation units at DTC Bus depot premises with related infrastructure, on the consideration of discount @ 1.20 per kg. on CNG from the prevailing prices, amount to renting of immovable property for consideration. Penalty u/s 78 of FA - Held that:- The crucial details and information have been suppressed from the Department which have led to the evasion of service tax - the provision of Section 78 and 77 of Finance Act, 1994 rightly invoked. Appeal dismissed - decided against appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax of ₹ 9,16,12,634/- under Section 73 (1) of the Finance Act, 1994, penal provisions under Section 77 and 78 have also been invoked. The matter came to be adjudicated by the learned Commissioner vide its order dated 01/07/2014 whereunder it has confirmed the above-mentioned amount of the service tax and has imposed penalty of ₹ 10,000/- under Section 77 of the Finance Act, 1994 and a penalty equal to the service tax demand have also been imposed under Section 78 of the Finance Act, 1994 on the appellant. 2. The learned Advocate appearing on behalf of the appellant has argued that there was genuine confusion on the part of the appellant to understand the leviability of the service tax of letting out the premises for setting up CNG stations within the bus depot premises of the appellant as there was no lease or rent agreement between the appellant and M/s IGL specifically for renting of the space. M/s IGL has already made a payment of additional amount of the excise duty demanded by the Department on the discounted amount of CNG price. M/s IGL has already deposited a sum of ₹ 3.21 crores with the excise department in this regard. It has further been assailed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and operating the infrastructure of the dispensing units in buyer s premises and including bulk discount. The discount by the seller would be Rs.1.20 per Kg. from the date of signing of the Agreement. 4.2 Supply Agreement dated 24/12/2008 between IGL (the seller) and DTC (the buyer) for sale of CNG 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 and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve a look of the definition of renting of immovable property given in the Finance Act, 1994. renting of immovable property includes renting, letting, leasing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce but (i) renting of immovable property by a religious body or to a religious body; or (ii) renting of immovable property to an educational body, imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre; Explanation I. For the purposes of this clause, for use, in the course or furtherance of business or commerce includes use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple use buildings; Explanation 2. - For the removal of doubts, it is hereby declared that for the purposes of this clause renting of immovable property: includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the said immovable property: AND Section 65 (105) (zzzz) defines the taxable service as any service provided or to be provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r whether the payment in the form of discount given by M/s IGL to the appellant can be considered as a payment of the rent for the service provided by them for renting of immovable property as provided under Section 67 of the Finance Act, 1994 :- SECTION [67. Valuation of taxable services for charging service tax. - (1) Subject to the provisions of this Chapter, where service tax is chargeable on any taxable service with reference to its value, then such value shall, - (i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money as, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that providing the space for setting up of dispensation units at DTC Bus depot premises with related infrastructure, on the consideration of discount @ 1.20 per kg. on CNG from the prevailing prices, amount to renting of immovable property for consideration. 10. With regard to the invocation of Section 78 of Finance Act, 1994, we find that the appellant have entered into an agreement with M/s IGL for providing space and other infrastructural facilities for setting up of CNG dispensation units on a consideration in the form of discount. We feel that since the appellant are working under the scheme of self-assessment under the service tax laws it was the duty of the appellant to approach the Department and get a clarification whether the type of the agreement which have been entered by them with M/s IGL will amount to provision of service namely renting of immovable property and whether they need to discharge any service tax on the same or not. Since, no pro-active action has been taken by the appellant in meeting his statutory liability regarding payment of service tax. We, therefore, feel that crucial details and information have been suppressed from the Department which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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