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2015 (10) TMI 1736 - CESTAT MUMBAI

2015 (10) TMI 1736 - CESTAT MUMBAI - 2016 (41) S.T.R. 127 (Tri. - Mumbai) - Renting out of immovable property - Assessee contends that they gave only vacant land which is excluded from taxable services while revenue contends that they had leased out Port land to private parties which is taxable - Assessee is aggrieved by demand of interest while revenue is aggrieved by non-imposition of penalties.

Held That:- Assessee leasing out vacant land and water front, is covered under the exclu .....

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- Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) For the petitioner : Shri S.B. Gabhawalla, C.A. For the Respondent : Shri R.K. Das, Dy. Commr (AR) ORDER Per: M.V. Ravindran These appeals are directed against Order-in-Original No. 2/Commissioner /Goa/ST/25/09-10 dated 29.01.2010. Assessee as well as revenue are aggrieved by the order in original hence the appeals are disposed by a common order. 2. The relevant facts that arise for consideration are during the peri .....

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was issued directing the appellant assessee to show cause why service tax liability be not demanded with interest and penalties not imposed. Appellant assessee contested the show cause notice on merits as well as on limitation. The adjudicating authority after following due process of the law, rejected the contentions raised by the appellant assessee. Adjudicating authority confirmed the demand of service tax with interest and dropped the proceedings initiated for levy of penalties. Appellant a .....

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ties services and submit that vacant land is excluded from the scope of the definition and the words immovable property needs to be considered accordingly. He would take us to the lease agreement entered by the appellant assessee and submit that it is for the lease of vacant land. He would submit that the structures on the vacant land are constructed by the lessee and are not the property of the appellant. It is his submission that the appellant charges separately for the facilities like harbour .....

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tes that the appellant had rented out the vacant plot/land for commercial or business activities. He would submit that if the vacant land used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes is excluded from immovable property. It is also his submission that if vacant lands are put to dual use then the exemption is not available. He would also submit that clause (b) be of explanation I will also not be applicable. He would rely upon the judgement of Honourable .....

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ot of a statutory activity and the same is undertaken for a consideration then in such cases service tax will be leviable. 5. We have considered the submissions made at length by both sides and perused the records. 5.1 It transpires that the appellant assessee is port trust and renders the services classified under Port services and discharges service tax liability. During the material period in question, the appellant assessee has leased out vacant land for commercial use by private parties. Th .....

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structures. We have perused the lease agreement entered by the appellant assessee. The said lease agreement is annexed at Annexure D in the appeal of assessee appellant. We find that the terms and conditions of the lease agreement which is entered by the appellant assessee, as state government undertaking, contains standard clauses. We find that the appellant assessee had leased out land area and water area for the use of the lessee and granted permission to him for construction of dry dock, jet .....

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to be provided (to any person, by any other person, by renting of immovable property or any other service in relation to such renting, for use in the course of or, for furtherance of, business or commerce) Explanation 1. For the purposes of this sub-clause, immovable property includes (i) building and part of a building, and the land appurtenant thereto; (ii) land incidental to the use of such building or part of a building; (iii) the common or shared areas and facilities relating thereto; (iv) .....

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s clearly incidental to the use of such vacant land; (c) land used for educational, sports, circus, entertainment and parking purposes; and (d) building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities. Explanation. 2 - For the purpose of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for resi .....

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envisage any restriction as to it is to be put for non-commercial use. In our considered view the appellant assessee having leased out the vacant land and the water front, is covered under the exclusion provided in the definition. We find strong force in the contentions raised by the learned Counsel that in the case of Mundra Port & Special Economic Zone Ltd. (supra) in paragraph number 17 and 19 the Tribunal has on similar issue held such leases or not taxable. We reproduce the relevant pa .....

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by examining each and every agreement, he has confirmed the demand in respect of six agreements. It is seen that the various activities held by the Commissioner having been provided under the business support services are in relation to Dredged channel, Marine and port facilities, access to main road, usage of Railway, use of existing basic telecom infrastructure, drainage and sewerage lines, tapping point for electrification and providing of other already available facilities. Nevertheless, we .....

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y for providing vacant land for use of the same. The threadbare examination of the agreements, whereas in some cases along with identical facilities, some more might have been provided was not called for. 19. Inasmuch as admittedly in the present case, it is use of the vacant land, which stands provided by the appellants to various lessees along with 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 .....

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