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TMI Blog2023 (3) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... re, was made prior to 01.07.2003, Whether the appellant is liable to pay service tax for the period post 01.07.2003. The second issue whether the appellant's demand under commission service is time barred when the service of commission provided by giving table space to the finance company for sale of their finance product. 2. Shri Hardik Modh, Learned Counsel appearing on behalf of the appellant submits that in the case of franchise service since the contract as well as the payment was made prior to levy of service tax on 01.07.2003. The service tax is not chargeable even if the part of service was involved for the period post 01.07.2003. As regard the demand on Business Auxiliary Service under the sub head of commission, the service of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) appearing on behalf of the revenue reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the records. We find that on the first issue whether the appellant is liable to pay the service tax on franchise service for the period post its implementation i.e 01.07.2003. The fact which is not under dispute is that the appellant have entered into a contract of franchise agreement before 01.07.2003. and the payment of such contract was also made at the time of entering into the contract. In this fact the Hon'ble Rajasthan High Court has decided the matter holding that when the contract was entered and payment thereof was made at a subsequent stage if the service was brou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter when we have to interpret the taxing statute, we have to interpret Article 265 and the possibility of interpretation should not be avoided to be very impracticable for either of the side. 33. In that view of the matter, we make it clear that any payment of contract which are entered after 1-7-2003 will invite Service Tax and any contract which is concluded prior to 1-7-2003 will not invite imposition of Service Tax. 34. In that view of the matter, the issue is required to be answered in favour of the assessee. 35. Regarding the second issue, any contract of payment received prior to 1-7-2003 is not the condition for taxing. The tax will be imposed on the payment received thereafter. It is stated that the payment is already receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be taxable. However, in the present case, there is no allegation that the appellant has received any rent/consideration after 1-7-2010. This being so, the demand cannot sustain. 8. The issue stands covered by the decision of the Hon'ble High Court of Allahabad in the case of Greater Noida Industrial Development Authority (supra). The Hon'ble High Court upheld the order passed by the Tribunal and referred the same in the order, which is reproduced as under :- "18. The Tribunal has recorded a specific finding that prior to the introduction of new clause on 1st July, 2010 the renting of vacant land within the enumerated taxable service was not embarrassed upon. 19. With reference to its earlier order in the case of assessee itself da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the lease. The C.B.E. & C. Board Circular No. 334/2010-TRU, dated 26-2-2010 (in paragraph 3) explains the purpose of the amendments to Section 65(105)(zzzz). Accordingly, the Circular explains that amendments are being made in the definition of this taxable service to provide that renting of vacant land where there is an agreement or contract between the lessor and lessee for undertaking construction of buildings or structures on such land for furtherance of business or commerce during the tenure of the lease, shall be subjected to service tax. The statement of objects and reasons accompanying the Finance Bill, 2010 also clarify that clause 75 of the Bill seeks to amend Chapter V of the Finance Act, 1994; to modify the scope of certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid reasons, the question of law as raised by means of the present Excise appeal is answered against the department. 22. The Excise appeal is dismissed. Interim order, if any, stands discharged." 9. Similar view was taken by the Tribunal in the case of Tuticorin Port Trust v. CGST & Central Excise, Tirunelveli reported in 2018 (10) TMI 477 CESTAT, Chennai. Following the above decisions, we are of the considered opinion that the demand cannot sustain. The impugned order is set aside. The appeal is allowed with consequential relief, if any." In view of the above judgments, it is settled that in respect of Franchise Service the service tax will arise as per the date of contract and date of payment for the service and if the same is at a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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