TMI Blog2023 (5) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... MANDI SAMITI, NEW MANDI YARD, ALWAR VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, ALWAR [ 2022 (2) TMI 1113 - SUPREME COURT] , the issue on merit has been decided against the assessee. Extended period of limitation - HELD THAT:- The demand for the extended period is not sustainable on the ground that there is no malafide act to evade service tax. Cum-tax value - HELD THAT:- The appellant is eligible for such benefit. Revenue is at liberty to work-out the demand for the normal period by extending the cum-tax benefit and recover/ adjust from the deposit made by the appellant, if any - Appeal allowed. - SERVICE TAX APPEAL NO. 12928 OF 2014-DB - FINAL ORDER NO. A/11031 / 2023 - Dated:- 27-4-2023 - HON BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) And HON BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) Shri Jigar Shah, Advocate for the Appellant Shri Himanshu P Shrimali, Superintendent (AR) for the Respondent ORDER RAMESH NAIR : ORDER The issue involved in the present case is that whether the appellant, Agriculture Produce Market Committee (APMC for short) is liable to pay service tax on the rent recovered towards renting of shops, godown, office et ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h applicable facts are brought out in the notice. Not mentioning the changing Section by itself will not be fatal to the proceedings. 7. The appellants status as an authority created under a State enactment is not in dispute. Their overall functions and the activities were regulated by the said enactment and the rules made thereunder is also an admitted fact. The appellant strongly pleaded that they are allotting land/shops to various traders in furtherance of their statutory functions for promoting welfare of agriculturists. Reliance was placed by the appellant on the clarification issued by the Board vide Circular dated 18-12-2006. The said circular is reproduced below :- Circular No. 89/7/2006, dated 18-12-2006 : A number of sovereign /public authorities (i.e., an agency constituted/set up by Government) perform certain functions/duties, which are statutory in nature. These functions are performed in terms of specific responsibility assigned to them under the law in force. For examples, the Regional Reference Standards Laboratories (RRSL) undertake verification, approval and calibration of weighing and measuring instruments; the Regional Transport Officer (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is not taxable as clarified under C.B.E. C. Circular No. 89/7/2006-S.T., dated 18-12-2006 read with C.B.E. C. Circular No. 157/8/2012-S.T., dated 27-4-2012. (ii) The appellant have been providing another kind of service, which is not in the nature of Statutory activity and the same is undertaken for a consideration like renting of shops, canteen, dharamkanta in the krishi upaj mandi samiti market area. I find that this is liable to Service Tax as amply clarified in Para 3 of C.B.E. C. Circular No. 89/7/2006-S.T., dated 18-12-2006 and reiterated under para 6 of C.B.E. C. Circular No. 157/8/2012-S.T., dated 27-4-2012. 9. It is relevant to note that here that the allotment of land/shops to the traders is not in terms of the Rajasthan Agricultural Produce Markets Act, 1961 or the rules made thereunder. In fact, in the written submissions, made by the ld. Counsel for the appellants in Appeal No. ST/50069 of 2017 and ST/51936/2016, it is specifically mentioned that the allotments of land and shops were made by the appellants in terms of the Immovable Property Allotment Rules, 2005 and the fees are received for such allotments. We have examined sample copies of allot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce by way of (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (ii) supply of farm labour; (iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (v) loading, unloading, packing, storage or warehousing of agricultural produce; (vi) agricultural extension services; (vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce. 11. It is clear that the appellants, being an Agricultural Produce Marketing Committee, is excluded from the tax liability in terms of the above provisions. Services relating to agricultural produce by way of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recognized education at higher levels and approved vocational education, renting of residential dwellings, entertainment and amusement services and a large part of public transportation including inland waterways, urban railways and metered cabs. 162. Agriculture and animal husbandry enjoy a very important place in our lives. Practically all services required for cultivation, breeding, production, processing or marketing up to the stage the produce is sold in the primary markets are covered by the list. 13. It is mentioned that practically all services required for cultivation, breeding product, processing or marketing up to the stage the produce is sold in the primary markets are covered by the list. In the present case, we note that we are dealing with the shops and land given out on rent, which are in the primary market areas, where agricultural produce are brought for sale. The allotment stipulates that the shops/godown shall be used for business of notified commodities and licence is issued by the Market Committee. As such, the premises in the primary market areas are let out with reference to agricultural produce, their storage/warehousing, etc. During the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. 17. We also note that the tax entry renting of immovable property service itself was subject matter of serious litigation in various judicial forum. In fact, the Hon ble Delhi High Court in the case of Home Solutions Retail Ltd. v. Union of India - 2011 (21) S.T.R. 109 (Delhi) held that the activity of the rent per se cannot be subjected to Service Tax levy, whereas the activities in relation to renting are liable to Service Tax. The decision of the Delhi High Court led to legislative changes including retrospective amendment of the concerned legal provisions in the Finance Act, 1994. In fact, for non-payment of Service Tax under this tax entry, special provision was made under Section 80(2) to waive the penalties. Considering these backgrounds and the status of the appellant as a Government Organisation, we find that the ingredients for invoking demand for extended period are not present in the present case. Accordingly, the demands raised shall be restricted to normal period only. On the same reasons, we hold that penalties imposed on the appellants are also liable to be set aside. 18. In view of the above discussions and analysis, the appeals are disposed of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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