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TMI Blog2019 (12) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... up for decision before this Tribunal in the case of PUNJAB STATE WAREHOUSING CORPORATION VERSUS 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. Thus, the service provided by the appellant is covered under the category of storage and warehousing services and renting of immoveable property services in terms of Section 65(105)(zzzz) of the Act as defined in the impugned order. Demand pertaining to the period after 01.07.2012 - declared services or not - HELD THAT:- The impugned order has considered the services under the category of declared service under Section 66E of the Act, wherein at the Sl. No. (a) renting of immoveable property has been treated to be deemed service under the negative list. However, on perusal of the provisions, it is found that the services being rendered by the appellant would be more appropriately covered under the category of the services which are under the negative list vide entry no. 66D(v) - the impugned order is incorrect in holding the services rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 also thereafter in the Finance Act, 1994 (for sought the Act). Aggrieved by the impugned order the appellants are in appeal before this Tribunal. 4. Brief facts of the case are that the appellant is engaged in providing services to PUNGRAIN vide agreement dated 14.01.2013. It is the agreement is for providing of warehouse and other ancillary services such as security, insurance provision of main power, weigh bridge operation, etc. The appellant classified their services under the category of storage and warehousing services of the agricultural produced, however, the Department was of the opinion that the appellant has provided renting of immovable property services which attracted service tax under Section 66B read with 66E of Finance Act, 1994, after the introduction of negative list regime and prior to 01.07.2012 that under clause 105(zzzz) of Section 65 of the Act. The show cause notice was adjudicated by the impugned order and the claim of appellant regarding classification of services under stora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assifiable 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 on the various clauses contained in the agreement dated 01.07.2012 especially the following paragraphs:- 4.3 I find that the issue to be decided before me is whether the services relating to renting of godwons to M/s. PUNGRAIN by the noticee are taxable under the category of Renting of Immovable Property as alleged by the department or the same is covered under the category of Storage and warehousing service. 4.3.1 From the case records, I find that with reference to the jurisdictional Range Officer letter. The District Manager, PUNGRAIN, Mansa vide his letter No. A-3/2013/312 dated 30.01.2014, furnished the details of rent paid to the Noticee and other Godown owners in respect of godowns hired for storage of food grains of FCI. It was also informed that FCI paid rent to them and entire amount after deducting TDS was paid to the godown owners. 4.3.3 The noticee vide thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 read as under: It is certify that services of supervisions, preservation, maintenance and security provided by the District Manager PUNGRAIN, Mansa in this Godown during the Month of May 2014 is satisfactory in accordance with the terms conditions of PEG 2008 scheme. Similar description has been given on the copy of remaining two bills furnished by the Noticee. In this regard, it is observed that as per the certificate given by the FCI officers, PUNGRAIN was providing the services of preservation, maintenance and security. Further the Noticee ha put on record the copies of Bills pertaining to the year 2014-15 and that too after the issuance of the show cause notice for the period 2012-13. The Noticee has not put any such documents such as copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1,04,000 MTs @ ₹ 62.08 per MT per and the rent amount paid by the PUNGRAIN is ₹ 65,31,200/- per month. I observe that the godowns have been 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 clearly shows that the whole godowns have been rented out by the Noticee to the PUNGRAIN and the possession of the Godowns is with PUNGRAIN. 10. Accordingly, it was argued that there is no infirmity in the order passed by the adjudicating authority and the same is to be required to be sustained in the appeal. 11. We have considered the rival submissions and also perused the case record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 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, security etc should not be more than the last declared CWC rates for FCI for ne year guarantee hiring minus 15%. Further, for the purpose of this ceiling (ceiling for annual revision of rates) only the latest available CWC rates will be taken as a ceiling mark and in future no revision will be done from the back date on the ground that at the time of annual revision of rates, CWC rates belonged to some earlier year and the revised rates for the year in question have been declared now. Accordingly, where the implementing agency decides to hire the godown from private parties for both the space as well as preservati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mping 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 and Measure Department and taking up of repairs of the Weighbridge shall be the responsibility of the Entrepreneur. In case the Entrepreneur delays of fails to do the repairs as above, PUNGRAIN is at liberty to undertake the work and the expenses will be charged on the rent payable. 15. The entrepreneur must keep the scheduled property duly insured at all times during the agreement period. 22 ----------- c. The security deposits will be refunded to the entrepreneurs on due and satisfactory performanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of FCI insured against the risk of flood, fire, theft and burglary during the currency of the contract, however no insurance would be obtained/arranged in the case of loss due to the natural calamities, natural disasters and civil commotion and earthquake etc. The instance cover against these risks would, however, be arranged by PSWC on the request of the FCI well in advance in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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