TMI Blog2012 (6) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... e to it as cenvat credit, and can be used to meet its liability on services rendered by it. demand not liable to be sustained Regarding upfront charges - ownership/lease hold rights of the equipment of the appellant shall stand transferred to the licensee from the date of receipt of first instalment of the upfront payment. consideration received was accounted in the financial records of CPT as sundry debtors and the value of the assets written off at the written down value of ₹ 7.6 crores. Even if the equipment is held to have been leased to IGTPL and not sold, no tax can be levied on the consideration as it is not received towards port services rendered by CPT Regarding rental amounts collected for renting out various jetties withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. 2. The assessee had entered into an agreement with M/s. India Gateway Terminal Pvt. Ltd. (IGTPL) for operation and management including necessary modification and augmentation of facilities for a maximum period of 8 years and 6 months from the date of commencement of commercial operation of container transport at Rajiv Gandhi Container Terminal (RGCT) at Cochin Port. In terms of the agreement, IGTPL shall pay CPT royalty every month equal to 1/3rd of the gross revenue earned by IGTPL from the operation of the project. The agreement also provides for IGTPL paying license fee for use and occupation of the project site. An amount of ₹ 40.80 crores is payable by IGTPL in 8 yearly instalments towards the transfer of assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etties ₹ 5,96,071/- ₹ 71,210/- ₹ 1,424/- ₹ 712/- 4. Estate Rentals ₹ 12,91,26,562/- ₹ 1,48,96,824/- ₹ 2,97,936/- ₹ 1,48,968/- Total ₹ 34,74,86,030/- ₹ 4,08,34,791/- ₹ 8,16,695/- ₹ 4,08,348/- The Commissioner also imposed penalties on CPT under Sections 76, 77 and 78 of the Finance Act, 1994. 3. The impugned order is challenged on various grounds. Royalty charges were paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f dispute : Port Service means any service rendered by a port or other port, or by such port or other port, in any manner in relation to a vessel or goods. The royalty amounts were paid by IGTPL @ 33.33% of its gross revenue under its agreement with CPT. This amount was paid by IGTPL to CPT for allowing it to develop and operate Rajiv Gandhi Container Terminal at the port premises. We do not find any logic in treating CPT allowing IGTPL, to develop and operate the container terminal as an activity falling under port services. The royalty received by the appellant is not a consideration for any port services rendered by CPT. If at all IGTPL pays service tax as demanded, the same will be available to it as cenvat credit, and can be us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licensor (such approval shall not be unreasonably withheld by the licensor.) For the purpose of making its decision, the licensor shall hold discussions with the licensee, and consider factors such as the remaining useful life of the licensor's equipment sought to be disposed off and appropriation of the value received on disposal of and appropriation of the value received on disposal against the remaining instalments of the Upfront Payment. In terms of this clause, ownership/lease hold rights of the equipment of the appellant shall stand transferred to the licensee from the date of receipt of first instalment of the upfront payment. The leasehold rights and ownership of crane leased from M/s. ABG Heavy Industries Ltd., was also pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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