Sharing of revenue - support services of business or commerce - As per the sub concession agreement, MICT is to make the payment to the appellants as water upfront charges, royalty at the ate of 10% of the total revenue per annum and profit sharing, by whatsoever name called. - Held that:- infrastructure development by the appellants was an obligation on their part created under the agreement between them and Government of Gujarat, and it cannot be held the same was primarily and basically for MICT. The appellants have been given the right to develop Mundra Port and it was for the development of port that such infrastructure facilities were being created by them. - no services, falling under the category of support services of business or commerce, were being provided by the appellants to MICT.
Freight & terminal sharing from Railways - As per agreement entered by the appellants with North Western Railways, they have laid down the railways lines for the running of the railways. As per the new policy, the cost of laying down of railways lines, instead of being borne by the Government of India, is to be borne by the private parties. The Railways operates the said railways and after recovering all the operation cost, pays balance amount to the investors.- Held that:- it is the railways who have provided services to the appellants. Similarly, maintenance of the assets which are admittedly assets of the appellants does not amount to providing any business support services to the railways. - not liable to service tax.
Vacant land - held that:- it is use of the vacant land, which stands provided by the appellants to various lessees alongwith the facilities, the same would not fall even within the taxable services of rent of immovable property. The demand on this count is accordingly not sustainable.
Rule 6(3) of Cenvat Credit - Exempted service or non taxable service - the appellant took plea that they are not providing taxable as well as exempted services. The services which are considered to be exempted are, in fact, are non taxable services. In such a case, the provisions of Rule 6(3) (c) of Cenvat Credit Rules, 2004 would not get invoked. - Held that:- It is not being disputed the excess utilization of credit was in the knowledge of the Revenue, inasmuch, ST-3 returns were being filed by the appellants. Further, there could be some scope of entertaining the bonafide that inasmuch the appellants are not providing the taxable as well as exempted services, the entire credit was available to them for utilization. - Demand set aside in view of of the provisions of section 73 and section 80 of the Act.
Services provided to SEZ units - payment of 8% - Held that: Board's circular No. 105/8/08 dated 16.9.08 clarifies the issue of payment of service tax applicable on taxable services provided by the SEZ unit except such services which are exempted by Notification No.04/04-ST dt.31.3.04, is apt. If the services provided to SEZ unit are exempted services they are required to pay an amount of 8% of the value of exempted service in terms of the provision of Rule 6(3) (i) of Cenvat Credit Rules, 2004 - Demand upheld on this issue.
