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2019 (1) TMI 319 - AT - Service TaxValuation - inclusion of discount allowed by the IGL to DTC - Department after detailed investigation reached to the conclusion that discount of ₹ 1.20 in the prevailing price of per kg. CNG was in fact in lieu of renting of immovable property to M/s IGL by the appellant - demand of service tax on such amount - whether Department is correct in treating the discount portion as renting of immovable property service? - invocation of penalty u/s 77 and 78 of FA. Held that:- The appellant have let out a part of bus depot premises to M/s IGL for purpose of furtherance of business and commerce. As it is an admitted fact that M/s IGL is a business concerned engaged in the business of purchase and sale of Compressed Natural Gas on profit basis. The above-mentioned agreements between the appellant and IGL categorically mentions that discount which is given by M/s IGL to the appellant on the sale of CNG to them from the prevailing market prices is primarily in lieu of the space and logistic infrastructure provided by the appellant to M/s IGL. As 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.
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