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M/s Kapsons Electro Stampings Versus Commissioner of Central Excise & another

2015 (6) TMI 84 - PUNJAB & HARYANA HIGH COURT

Waiver of pre deposit - renting of immoveable property service - Held that:- Renting of immoveable property had been brought in to the service net w.e.f. 01.06.2007 vide notification dated 22.05.2007. The explanation to Section 65(90a) of the Finance Act provide that renting of immoveable property includes use of immoveable property, factories, office buildings, warehouses plus for use in the course or furtherance of business or commerce. Sub-section (105)(zzzz) also provides that taxable servic .....

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r the different heads of land and building and the plant machinery and the agreement dated 29.03.2011 was not registered under the Registration Act, 1908.

Court is not inclined to interfere with the discretion which has been exercised and where the benefit of pre-deposit has been restricted to a reasonable amount, in favour of the appellant. However, since an interim order had been passed in favour of the appellant on 24.12.2014 that the appellant would deposit a sum of ₹ 8 lacs .....

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ion 83 of the Finance Act, 1994 (for short the 'Finance Act') read with Section 35 G of the Central Excise Act, 1944 (for short, the 'Act'), is directed against the order dated 20.11.2014 (Annexure A-13), passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short, the 'Tribunal'). Vide the said order, the Tribunal has refused to interfere in the order of the Commissioner (Appeals) dated 31.01.2013 (Annexure A-10) wherein pre-deposit on the en .....

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was that the rent note executed by the appellant showed that the building, plant and machinery along with other infrastructure had been rented out and therefore, fell within the renting of immoveable property and was, thus, exigible to service tax. 4. A perusal of the paperbook would show that a show cause notice dated 19.06.2009 was issued to deposit the service tax amounting to ₹ 10,28,160/- along with interest on account of the fact that during the audit conducted on M/s Kapsons Indust .....

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documentary evidence and pay service tax upto 30.06.2009. On 10.08.2009, the appellant submitted the details of the lease/rent receipts from 01.04.2008 to 30.06.2009 and vide notice dated 30.05.2011 (Annexure A-6), it was asked to deposit the service tax of ₹ 46,04,320/- along with interest. The final audit report further raised various dues and violations which had been made by the appellant. 5. Accordingly, an order dated 15.12.2011 (Annexure A-9) was passed by the Adjudicating Authorit .....

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ed service tax, apart from the demand of ₹ 31,86,820/- along with penalty of ₹ 200/- per day, during which, such failure continued, apart from the penalty of ₹ 5000/- and an equivalent penalty also under Section 78. 6. The appellant filed an appeal before the Commissioner (Appeals) and filed an application praying for waiver of the penalty as prescribed under Section 35F of the Act. The plea taken that the service tax was not liable to be paid since the rent amount had been div .....

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irement of pre-deposit of interest and penalties imposed under the impugned order. The said amount was to be deposited within 15 days. The appellant, thereafter, challenged the said order by filing CWP No.4800 of 2013, which was disposed of with the observations that an appeal should be filed before the Tribunal. Resultantly, the impugned order has been passed whereby the Tribunal has declined to interfere in the discretion exercised by the Commissioner (Appeals). 7. Counsel for the appellant ha .....

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arding the pre-deposit. 8. Counsel for the revenue, on the other hand, supported the order and submitted that the discretion exercised was not lightly to be interfered with and under the provisions of the Act, the service was taxable and only on account of the audit of M/s Kapsons Industries, the factum of the violation had been detected and in such circumstances, no question of law arises which would require consideration by this Court. 9. The unamended provisions of Section 35F of the Act prov .....

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t under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied : Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as .....

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ildings, warehouses plus for use in the course or furtherance of business or commerce. Sub-section (105)(zzzz) also provides that taxable service means providing of any service by renting of immoveable property The argument that as per the amended lease deed dated 29.03.2011, the building was only let out for ₹ 55,000/- per month and the rest of the amount was only on account of the rent of the immoveable plant and machinery, which was moveable and not covered under the Act, prima facie, c .....

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as no undue hardship. 11. The amended rent deed whereby the rent was fixed at ₹ 7,00,000/- per month, which was divided into two accounts, for land and building to the tune of ₹ 55,000/- and ₹ 6,45,000/- for the use and other facilities, does not show any details as to which of the plant and machinery had been leased out for the huge rental of ₹ 6,45,000/- per month. Relevant portion of the agreement reads as under: In consideration of the sum of ₹ 10.00 Lacs (Rupee .....

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bed in the schedule attached hereto together with all attachments, whatever belonging to and hereto together with all attachments, whatsoever belonging to and hereto enjoyed by the Lessor unto 'The Lease' from, the first day of April, 1997 for a period of ten years during which period 'The Lessee' shall pay the sum of ₹ 7,00,000 (Rupees Seven Lacs only) per month as divided into ₹ 55,000.00 (Rupees fifty five thousand only) per month for the use of land & building .....

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