9911796707
TMI Blog2019 (12) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... 30/- has been confirmed. However, in terms of proviso to Section 78(1) of the Act, the amount of penalty will stand reduced to twenty five percent if the same is paid along with the amount of outstanding service tax and interest within 30 days from the date of communication of this order. (IV) I impose penalty of Rs. 19,37,415/- upon the noticee under Section 76 of the Act for the period 2013-14 & 2014-2015 for which service tax demand of Rs. 1,93,74,152/- has been confirmed. However, in terms of Section 76(1)(ii) of the Act, the amount of penalty will stand reduced to twenty five percent if the same is paid along with the amount of outstanding service tax and interest within 30 days from the date of communication of this order. (V) I impose penalty of Rs. 5,000 for each of the show cause notice and statement separately upon the noticee under Section 77(1) of the Act. (VI) I impose penalty of Rs. 5,000 for each of the show cause notice and statement separately upon the noticee under Section 77(2) of the Act. The period of demand is Pertaining to period 01.04.2012 to 30.06.2012 and 01.07.2012 to 2014-15, both the periods, prior to introduction of negative list regime and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, PUNGRAIN to all district managers directing them to a withhold the rent of the appellant as their godowns were only rented along with services basis. 7. Ld. Advocate also placed reliance on the CBEC instructions, F.No. 137/26/2006-cx dated 05.11.2008, wherein it is clarified that if the warehouse along with other services are hired the same will not be falling under the category of renting of immovable property. Ld. Advocate further submitted that the issue stands decided this Tribunal in the case of M/s Punjab State Warehousing Corpn. Vs. CCEx., Chandigarh reported 2018 (2) TMI 154 - CESTAT, Chandigarh and Punjab State Warehouse Corpn. Vs. CCEx., Chandigarh II reported in 2018 (10) TMI 972-CESTAT, Chandigarh. 8. Ld. Departmental representative submitted that the appellant is providing their godown to M/s PUNGRAIN at fix monthly rate based on the storage capacity and thus the services rendered by them would be appropriately classifiable under the category of renting of immovable property as defined under Section 65(105)(zzzz) of the Act, prior to 01.07.2012 and thereafter under the category of declared service under Section 66E of the Act. 9. Ld. DR also placed reliance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur for such sublease. In view of the above, it is also seen that the possession/custody of the godowns remained with PUNGRAIN and none of the persons engaged by the Noticee for providing any type of service could enter the warehouse without permission of PUNGRAIN. Further PUNGRAIN was at liberty to sublease the godown to any other party without the permission of the Noticee. This establishes that the Noticee was providing a service of renting of immovable property while granting liberty to the service receiver even to sub lease the godwons in this case, to any party or entity. 4.3.5 The noticee in their reply has also contended that they were providing services of preservation, maintenance and security also. In support of their claim, they vide their letter dated 04.02.2015 have put on record, photocopies of bills dated 31-05-2014, 30-6-14 and 31-07-2014. On examination of the copy of the Bill dated 31.05.2014, it is found that under the description column, the Noticee has mentioned. "Service Charges for the M/o May 2014 (01/05/2014 to 31/05/2014) with Preservation, Maintenance and Security Services". However the certificate given by the Officers of FCI on these bills r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service will not change and the service provided by them will remain classified under "Renting of immovable Property'' service i.e. the major service provided in relation to renting of the Godowns by the Noticee on fixed monthly rent. 4.4 In view of the above, I observe that the godowns are being rented out to PUNGRAIN at a fixed monthly rent based upon its total storage capacity and rent is not being charged on actual quantity stored therein. This is fortified by Lease and Services agreement for hiring of godowns on fixed monthly rent on Guranteed Hire Basis (GHB) placed by the Noticee on record during adjudication proceedings of these cases and the Letters of District Manager, PUNGRAIN, Mansa wherein the details of amount paid as rent to the Noticee during the period 2012-13, 2013-14 and 2014-15 have been provided to the department. From above documents, it is observed that the godowns have been rented out by the Noticee to PUNGRAIN ON Guaranteed Hire Basis (GHB) for a particular period and the rent is calculated as a multiple of rent per unit (MT/Qtl) and the capacity of the godown. To elaborate, in case of godowns at Barreh Budhlada, the capacity of the godown is 1,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he PUNGRAIN shall pay the agreed rent to the Entrepreneur as far as possible within 15 days of the submission of monthly bills I triplicate copy supported by work certificates issued by the officers authorised by PUNGRAIN on or before ___ day of every calendar month at the rate of Rs. 62.08 per MT of capacity totalling to an amount of Rs. 65,31,200/- per month 104000 MT (gross area) and there will be no enhancement of rent during the agreed period of 7 year in case godown is hired with preservation and security etc. In case godown is hired with preservation and security etc annual increase in rent will be necessary to give some escalation every year to take care of the increase in preservation and security expenses because of increase chemical & labour cost. The increase will be given at the end of every year (after) making available the godown for storage based on 33% of inflation rate which is based on the wholesale price index (WPI) as published by Reserve Bank of India (RBI) for the Financial Year in which the annual rate of revision of godown rent falls. The said rate should be subject to the condition that after such an increase, the rates for space including preservation, se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epairs of exterior walls, roofing, burning of electrical wiring, changes of pipes etc shall be carried out by the entrepreneur within the time frame given by the PUNGRAIN through its local representative. Urgent repairs to stop damage to food grains or for the safely or security of PUNGRAIN/entrepreneur manpower or visitors etc, has to be carried out immediately. In case the entrepreneur delays or falls to dot the repairs as above, PUNGRAIN will be at liberty to undertake the work and the expenses will be charged on the rent payable and security deposit. Engine shunting charges, the stamping of the Weigh Bridge by the Weights and Measurements Department and taking up of regular repairs of the weigh bridge is the responsibility of the entrepreneur. However, if there is any mechanical problem which needs urgent repairs and entrepreneur falls to get it done immediately, it can be done by PUNGRAIN and expenditure so incurred will be charged from the entrepreneur and recovered from the lease rent. ................ ............... 14. Weighbridge operations will be one by the PUNGRAIN, however maintenance of the Weighbridge, periodical certification of the weighbridge by weights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he food grains is also not disputed by the Department. It is the contention of the Department that the appellant has not directly provided the warehouse storage services, but it is through M/s PUNGRAIN to F.C.I. This issue has come up for decision before this Tribunal in the case of Punjab State Warehousing Corporation vs. CCE, Chandigarh - 2018 (2) TMI 154 - CESTAT CHANDIGARH, wherein it has been held that such services would be more appropriately covered under the category of 'storage and warehousing services' in terms of Section 65(105)(zza) of the Act. The relevant portion of the aforesaid case is reproduced as under: "6. We have gone through the terms of agreement. The para 2 of the terms of agreement is reproduced below: "2. a) The PSWC agree to offer owned/hired/ godown capacity on rental basis to FCI on demand at various stations in the State of Punjab on General Hiring basis (GHB) on year to year guarantee utilization, further extendable on year to year basis with mutual consent. b) The PSWC agree to keep the godowns storage worthy and ready for acceptance of the stocks of FCI at all the time during the currency of agreement. c) The PSWC agree to get the stocks ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
