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

2015 (6) TMI 84 - PUNJAB & HARYANA HIGH COURT - 2015 (39) S.T.R. 745 (P & H) - 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 .....

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consolidated ledger account is being maintained and that there is no breakup for 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 a .....

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espondent JUDGEMENT G.S. Sandhawalia J. 1. The instant appeal, filed under Section 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 Commis .....

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t has strong prima facie case on merits? 3. The reasoning given by the Tribunal 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 intere .....

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rdingly, the appellant was asked to send the deposit particulars along with the 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, a .....

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was invoked and it was held that it was also liable to pay interest on the evaded 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 th .....

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tire amount of service tax confirmed against it and waived off in full the requirement 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 disc .....

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and that the Commissioner (Appeals) was not justified by denying the relief regarding 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 consider .....

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appealed against relates to any duty demanded in respect of goods which are not 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 levi .....

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f 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 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 .....

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ding the pre-deposit of interest and penalties imposed and noticed that there was 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 agr .....

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niture and fittings and other infrastructural facilities as particularly described 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 .....

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acre of land in Jalandhar and in such circumstances, the submission that it was not covered under the definition of immoveable property and does not come within the ambit of service tax, cannot be accepted. This Court would not interfere in the discretion which has been exercised by the authorities under the Act, in view of the facts and circumstances of the present case. The authorities were able to detect the amount of evasion of tax on the basis of the audit conducted on a sister concern and .....

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