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TMI Blog2025 (1) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... ther it is a statutory service performed by the assessee. It may be that the statute permits such activities of letting out of immovable property for augmenting its finances but the same cannot be termed as the service in public interest nor it is a mandatory or statutory functions of the Development Authority. Accordingly such activity of leasing do constitute a taxable service.' Vague SCN - HELD THAT:- There are no merits in the contention of the appellant that the show cause notice is vague etc., impugned order has specifically considered this issue and after examination of the said show cause notice concluded that there is no vagueness. Even otherwise till the time the show cause notice is able to communicate the allegations and reasons for the demand being made the same cannot be termed as vague. The show cause notice or in fact any document issued in course of transaction of Government business or in a judicial proceedings is not a document of literature but only means of communication. Till the time the person or whom the said document is issued is able to read and respond to the same, it cannot be termed as vague - there are no merits in the submissions made by the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determination of the Service Tax amount allowing the benefit of cum-Tax/ duty benefit for computation of service tax in view of the provisions of Section 67 (2) of the Finance Act, 1994. 2. I also uphold the penalty imposed under Section 78 of the Finance Act, 1994 against the appellant equal to re-determined/re-computed demand as ordered above. 3. I also uphold the penalty of Rs. 10,000/- imposed under Section 77 of the Finance Act, 1994 against the appellant. 2.1 On the basis of intelligence an enquiry was conducted by the officers of Anti-Evasion Branch of Central Excise Service Tax Commissionerate, Ghaziabad which revealed that the Appellants were evading payment of Service Tax on the taxable service under the category of Renting of immovable property Mandap Keeper/ Renting of Community Centre provided by them 2.2 Appellants had also not got themselves registered under Service Tax law and neither filed Service Tax returns (ST-3) nor deposited Service Tax in respect of the taxable services being rendered by them. 2.3 A show cause notice dated 17.04.2013 was issued to them asking to show cause to the Additional Commissioner Central Excise and Service Tax, Ghaziabad as to why: (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with the provisions of Section 68, 69 70 of the Finance Act, 1994, as amended. 2.5 Both the show cause notice were adjudicated as per the order in original referred in para 1 above, holding as follows: (i) I confirm the demand and recovery of Rs. 23,74,439/- ( Rs 16,86,976/- +Rs 6,87,463/-) (Rs Twenty Three Lac Seventy Four Thousand and Four Hundred Thirty Nine Only) towards Service Tax (including Education Cess and Secondary and Higher Education Cess) from M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad under Section 73(1) of the Finance Act, 1994. (ii) I order the charging and recovery of appropriate interest under Section 75 of the Finance Act, 1994 on the above amount of confirmed demand from M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad. (iii) I hereby impose penalty of Rs 23,74,439/- (Rs Twenty Three Lac Seventy Four Thousand and Four Hundred Thirty Nine Only)under Section 78 of the Finance Act, 1994 upon M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad (iv) I hereby impose penalty of Rs 10,000/-(Rs Ten Thousand Only) under Section 77 of the Finance Act,1994 upon M/s Ghaziabad Development Authority, Navyug Market, Ghaziabad,. (v) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Tax law nor filed Service Tax returns (ST- 3) in respect of the taxable services rendered by them as mentioned above. The Appellant's contention that the impugned order has confirmed a vague SCN wherein charge on Appellant was not set out is not correct as in both Show Cause Notices the charges/ allegations have, been very well elaborated supported by the appropriate provisions of Service Tax law. The Appellant also contended that they have received an amount of Rs. 5,55,000/- during the period 2008-2012, which were purely towards religious activities such as holding of kirtan, jagrans, satsang, organizing poojas etc., and these amounts are not taxable under the category of Mandap Keeper service as religious functions cannot be considered as any official, social or business function. I find that there is no evidence available on case record which may establish that they were providing their community centre for religious activities I have also perused the four sample invoices/ receipts enclosed by the Appellant which were issued for the booking of community centre. I find that it has not been mentioned anywhere on the said invoices the purposes for which the community centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not local authorities in view of the aforesaid definition Therefore, I hold that M/s Ghaziabad Development Authority did not fall under any of the above categories as per the provisions of Service Tax Law and thus they are not entitled to exemption granted under the mega Exemption Notification 25/2012-ST dated 20.06.2012 The Appellant's contention that there is no suppression of facts by them as their activities were all in public domain and it was carried out in open is also not tenable as they failed to declare to the department that they are providing taxable service. They neither got themselves registered with the department nor paid any service tax as well as filed their Service tax return. Therefore, I find that the extended period of limitation as envisaged under proviso to Section 73(1) of the Finance Act, 1994 has been correctly invoked in this case. The Appellant in their additional submission stated that vide the Finance Act 2010 Section 76(A)(6)(h)(i) and Section 77 reintroduced Service Tax on 'Renting of Immovable Property' retrospectively i.e. from 01.06.2007 by amending Section 65(105)(zzzz) which was challenged in the various High Courts. The said chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any case amount received towards renting/hire is to be treated as cum tax price in view of the provisions of Section 67 (2) of the Finance Act, 1994. I find that there is no evidence to the fact that the appellant has received the Service Tax amount from the tenant/clients hence amount received from Renting of Immovable Property service shall be taken as cum tax price in view of the provisions of Section 67 (2) of the Finance Act, 1994 Accordingly, I hereby direct the adjudicating authority/jurisdictional Divisional officer to re-determine the service tax liability allowing benefit of cum Tax price as stated above. 4.3 One of the ground for challenge of the demand made is that the appellant being government authority is not required to pay the service tax or is exempt as per the notification 25/2012-ST (Sl No 39) dated 20.06.2012 for the period from 01.07.2012. However we find that in the case of Greater Noida Development Authority [2015 (40) S.T.R. 95 (All.)] Hon ble Allahabad High Court has held as follows: 32. Similarly under Clause 999.01 with regard to the sovereign/public duties/functions, it has been clarified that activities assigned to and performed by the sovereign/pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y within one year from the relevant date, serve notice on the person chargeable with the Service Tax which has not been levied or paid or which has been short levied or short paid or the person to whom such tax has been erroneously refunded requiring him to show case as to why he should not pay the amount specified in the show cause notice. The term, relevant date is defined in sub-section (6) of the Section 73. With effect from 28-5-2012, the normal limitation period has been enhanced to 18 months. In terms of proviso to Section 73(1) wherever Service Tax has not been levied or paid or short levied or short paid or erroneously refunded by reason of fraud, any wilful suppression of facts, mis-statement or contravention of any provisions of Chapter V of Finance Act, 1994 or of the Rules made thereunder with intent to evade payment of tax, the notice for recovery of such short levied, short paid or erroneously refunded Service Tax can be made within 5 years from the relevant date. Thus, longer limitation period of 5 years is applicable only when there is an element of fraud, collusion, wilful mis-statement, suppression of facts or deliberate contravention of the tax provisions with i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idential purposes on long term lease basis. In our view, there is merit in the appellant s plea that they were under bona fide belief that the allotment of vacant land to various persons on long term lease basis for construction of building for industrial purposes, would not attract Service Tax under Section 65(105)(zzzz). Therefore, in the circumstances of the case, in our view, longer limitation period of 5 years from the relevant date would not be applicable and the Service Tax demand would survive only for the normal period of one year from the relevant date, which would be quantified by the adjudicating authority. For the same reasons, this is also a fit case, where by invoking the Section 80 of the Finance Act, 1994, penalties under Sections 76, 77 and 78 have to be waived and in terms of this section notwithstanding anything contained in the provisions of Section 76, 77 and 78 of the Finance Act, no penalty shall be imposable on the assessee for any failure, referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure and in this case, the Appellant is an organization functioning under the Government of U.P. and obvious reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus allowed the appeal before him and set aside the decree of the trial court. It is against this decision that this second appeal is directed. Mr. K. S. Nanavaty, learned Advocate appearing on behalf of the appellant plaintiff, has not disputed the aforesaid proposition of law laid down by this court in 6 G.L.R. 137. His only contention is that the finding of the learned District Judge that the duty has escaped payment due to error of misconception or exemption notification is not supported by any evidence inasmuch as the Inspector who had been alleged to have committed the error is not examined. There is no merit in this contention. The learned District Judge has observed in paragraph 9 of his judgment as under :- Before proceeding further in this connection, it must be made distinctly clear that it is not the plaintiff s case that as a fact excise duty was not leviable on the yarn cleared by the plaintiff from the place of manufacture as entered in register AR-1 Exhibits 35 to 50. It is not the plaintiff s case that since after the clarification issued by the Union of India this yarn cleared by the plaintiff would be exempt from the payment of duty. In fact, parties proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be applicable, will not make the notice invalid on that ground as has been held by this Court in J.K. Steel Ltd. v. Union of India, (1969) 2 SCR 418 (AIR 1970 SC 1173) : If the exercise of a power can be traced to a legitimate source, the fact that the same was purported to have been exercised under different power does not vitiate the exercise of the power in question. This is a well settled proposition of law. In this connection reference may usefully be made to the decisions of this court in B. Balakotaiah v. Union of India, (1958) SCR 1052 = (AIR 1958 SC 232) ; and Afzal Ullah v. State of U.P., (1964) 4 SCR 1991 - (AIR 1964 SC 264). 15 . In this case, the officer who issued the two notices is competent to make demands under both Rule 9 (2) and Rule 10-A. But in order to sustain the validity of the demand either under Rule 9 (2) or Rule 10-A, the appellants will have to go further and establish that the demands can be justified under either of the rules. 4.8 As we find that even after the introduction negative list regime with effect from 01.07.2012 onwards the activities undertaken by the appellant fall within the definition of service as per the Section 65B (44) and are tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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