TMI Blog2019 (5) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... services rendered or otherwise? - HELD THAT:- In this case, for the service of Clearing Forwarding Agency, they are charging an amount on which they are already discharging the service tax. There is no specific provision under which the rent on immovable property leased out to the companies providing C F services can also be charged to service tax. In the absence of any legal provision, the liability cannot be passed on the appellant. On an identical case, in the case of SWAMY SONS (AGENCIES) VERSUS CCE, C ST, HYDERABAD-III [ 2019 (3) TMI 245 - CESTAT HYDERABAD] , this Bench held that rental income earned by the assessee cannot be included in the value of Clearing Forwarding Agent services and the judgment of Hon ble Apex Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [ 2018 (3) TMI 357 - SUPREME COURT OF INDIA] . Appeal allowed - decided in favor of appellant. - Appeal No. ST/2114/2011 - A/30382/2019 - Dated:- 22-2-2019 - Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri R. Muralidhar, Advocate for the appellant assessee. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery of interest on the service tax amount under section 75 of the Finance Act, 1994. Hence this appeal. 2. Ld. Counsel for the appellant takes us through the facts of the case and submits that they had been paying service tax on the services rendered by them as clearing and forwarding agents as per agreements they had with the clients. In addition, they also have rental agreements for storing and warehousing of the goods. Seven of these agreements pertain to various parties on which they received the rent. To these parties, they had not rendered the services of clearing and forwarding agency and therefore in the impugned order the Commissioner dropped the demand insofar as the amounts collected as rent under these agreements was concerned. However, in respect of M/s LG Electronics Pvt. Ltd., they have two agreements one of which is as their clearing and forwarding agents and they have been discharging the service tax on the amounts collected for these services. They have a separate agreement with M/s LG Electronics Pvt. Ltd. for lease of the godown/warehouse where the goods are stored. It is held by Ld. Commissioner in the impugned order that this amount should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, rental income which they received from M/s LG Electronics Limited does not turn into taxable C F Agency services. He also argued on the matter on limitation. The show cause notice covering the period 2003-04 to May 2007 was issued on 14.10.2008. They have been registered with the Service Tax department since 1999 and have been regularly paying the service tax and filing ST-3 returns. Since the rental income has been received through separate agreement, the question of including such income in the ST-3 returns would not arise since renting of immovable property was not a taxable service during the relevant period. Therefore, they were and are still under the bonafide belief that the amount received towards rent is not chargeable to service tax, therefore no malafide can be attributed to them and the entire demand requires to be set aside even on account of limitation. He would also argue that on an identical issue in the case of Swamysons (Agencies) in appeal No. ST/401/2011 decided by this Bench by final order No. A/30204/2019, dated 05.02.2019 has held that rental income received for godown rent is not to be includable in the value of Clearing Forwarding Agency services. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring Forwarding Agent services include receiving goods, storing them and forwarding them. Storage would require some expenses which are also to be recovered from the clients. The appellant has been providing these services to M/s LG Electronics Limited but artificially split their agreements into two one for agency commission and another for renting of immovable property. In substance, both are part of the same service i.e. Clearing Forwarding Agent services, for which they are receiving the service charges under two different parts. Therefore, they are liable to discharge service tax on the entire amount along with interest. On the question of limitation, he would argue that the appellant is required to file ST-3 returns reflecting the true value of the entire services rendered by them and they have not done so. They have not included the amount collected as rent by M/s LG Electronics Limited. Therefore, the assessee has clearly suppressed the facts and have not come with clean hands. Therefore, extended period of limitation is invokable and penalties are imposable upon the appellant. 7. We have considered the arguments on both sides and perused the records. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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