DELHI INTERNATIONAL AIRPORT LIMITED Versus CGST-DELHI
Service Tax
2019 (2) TMI 869 – CESTAT NEW DELHI – 2019 (24) G. S. T. L. 403 (Tri. – Del.)
CESTAT NEW DELHI – AT
Dated:- 8-2-2019
Appeal No. ST/52332/2016-CUS [DB] – FINAL ORDER NO. 50213/2019
Service Tax
Shri Anil Choudhary, Member (Judicial) And Shri C.L. Mahar, Member (Technical)
Shri Somesh Arora, A.S. Hasija, Advocate for the Appellants
Shri Amresh Jain, AR for the Respondent
ORDER
Per Anil Choudhary:
The appeal is directed against Order-in-Original No.10/2016-ST dated 29.04.2016 issued vide F.No.DZU/Adj/DIAL/12/2015/3750 dated 02.05.2016 passed by Additional Director General, Directorate General of Central Excise Intelligence, New Delhi-110066.
2. The facts leading to the issuance of the impugned order briefly are that M/s Delhi International Airport (P) Ltd, New Udaan Bhawan, Opp. Terminal-3, IGI Airport, New Delhi-110037 (hereinafter referred to as DIAL) in pursuance of privatization process of
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
n the master plan norms of the competent local authority of Delhi, (as the same may change from time to time) of the total land area constituting the Demised Premises. Provided however that the Non-Transfer Assets, if any, that form part of the Carved-Out Assets and/ or situated upon the Existing Leases shall be taken into account while calculating the percentage of total land area utilized for provision of Non-Transfer Assets.”
Same was to be on 30 years lease extendable at the consent of both the parties.
3. Appellant DIAL under the OMD Agreement, also had at its disposal vacant land situated at the Hospitality District termed 'Aero City'. For development of these areas DIAL entered into two agreements one- termed as 'Development Agreement', one such detailed agreement with 'Silver Resort Hotel India Pvt. Ltd' (SRHIPL) entered into on 26.02.2010 has been submitted with the appeal memo and the other termed as 'Infrastructure Development and Service Agreement' (IDSA) and one such de
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
35.75
25.2.2010
25.2.2010
9
1.71
190,000
InterGlobe Hotels
nterGlobe Hotels
20.90
3.6.2009
3.6.2009
10
1.6
175,000
Bird Group
Bird Group
19.25
28.5.2009
28.5.2009
11
3.1
450,000
Bhati Realty
Aspen Buildtech
20.35
29.5.2009
29.5.2009
12
1.6
185,000
Wave Impex
Wave Hospitality
20.35
29.5.2009
29.5.2009
13
7.7
1,200,000
DB Hospitality
DB Hospitality
132.00
11.11.2009
11.9.2009
Total
45.09
6,120,000
653.13
The area wise details of each developer with whom agreements were entered and Allocated 'Advance development cost' (ADC) or 'total infra deposit' received are also given in the above table.
As per Article 3 of the Agreement the 'Advance development cost' was allocated to various successful bidders by allocating and working out the same on the basis of Rs. 1,100/- per Sq Ft. of maximum gross built up area.
The said Article 3 reads as below:-
“3.1 Advance Developmen
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Article 6.4 hereof, the Parties agree that any portion of Advance Development Cost paid by the Developer to DIAL, as has not been utilized by DIAL towards development of any infrastructure Facilities during the course of the Initial Term, as certified by the internal auditors of DIAL, shall be returned to the Developer upon the earlier of the expiry of the Initial Term or upon termination of Development Agreement in accordance with the terms thereof.
1.1.5 The Parties recognize and agree that nothing contained in this Agreement shall confer any title or ownership rights in respect of the Infrastructure Facilities on the Developer and any revenues accruing therefrom shall be solely to DIAL's account.
4. The total airport site area covered under OMDA with Airport Authority of India dtd. 04.04.2006 was 5000 acres, out of which 62.5 acres was allowed to be developed as “Hospitality District” for commercial development, out of which 45 acres were earmarked as asset area and leased out
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e facilities and were to be maintained by the appellant under 'IDSA Agreement'. In relation to these infrastructure development facilities, the IDSA agreement provided that DIAL shall be responsible to provide in Asset Area-3, following common infrastructure facilities, upon receipt of advance towards development cost, from the Developer, and payment of maintenance charges:
(i) power supply at 11KW to Developer in Asset Area-3, thereafter Developer shall be responsible for internal distribution.
(ii) water infrastructure and supply at Asset Area-3 at a single location,
(iii) Road Network, including peripheral roads, however Developers shall be responsible for development of all internal roads within Asset Area-3
(iv) Fire Fighting, DIAL to be responsible for common storage tank external fire ring main and Hydrants at common area of Asset Area-3. Developer to be responsible for internal storage tanks and installation of fire detection and fighting system within Asset Area-3.
(v) St
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
enting of Immovable Property Services' This, as per the department, was clarified to the appellant on 02/03.05.2012 vide C.No.IV(16)HQ/Tech/ST/179/2011, in response to clarification sought by M/s Aria Hotels & Consultancy Services Pvt. Ltd., which was one of the parties to such agreements with the appellant. Even though the letter itself mentioned that the issue is being referred to the Board for confirmation of views, but still the Ld. Commissioner has referred it as the final view of the Department in the impugned order. However, w.e.f. 01.07.2010 appellant discharged tax liability on License Fees received by them under Development Agreement with Silver Resort Hotel India Pvt. Ltd. (SRHIPL) entered into on 26.02.2010. Similarly the appellant has discharged tax liability on License Fees received by them under Development Agreement with other parties also. This issue is not in dispute. Prior to this on 09.07.2007 appellant had sought an opinion from M/s PWC, which had opined that no se
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
„license of land acquisition of development right, there is exposure of service tax or VAT to such transaction as explained below:-
Service Tax;
As per service tax law there is no service tax on the right to use of land. Further, in the Budget 2007 a new taxable category of 'renting of immovable property' has been inserted which excludes 'vacant land' from its ambit. Therefore the activity of licensing of land by DAPL, to licensee would not be chargeable to service tax. Also, the activity of grant of development right is not covered under any taxable category of service.
B. Whether advance received by DAPL from licensees towards development of basic common infrastructure facilities is taxable to service tax under service tax regulations?
Given the background that the licensee would pay the advance to DAPL for development of common infrastructure facilities, such as roads, power, water and other infrastructure facilities which DAPL is obliged to develop in terms of its Dev
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
t in the nature of building/ part of building. Accordingly, since the facilities being provided do not fall under the definition of immovable property, no service tax implication would arise under this category. Further, these services cover renting, leasing, letting out of immovable property. Renting, leasing, letting out of facilities is an arrangement wherein an exclusive right is granted for the immovable property, whereas in this case the various sub-licensees would be using these common facilities and there would be no exclusive right to anybody. Since these services are neither for renting, leasing or letting out in relation to an immovable property, they would not attract any service tax under the category of Renting of Immovable Property.
2. Business Support Services; As per the definition of support service under the service tax law, this category covers the services provided for effective administration of an organization. It specifically includes service of provision of i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
rport. For this purpose it is required to be examined whether the common facilities are located inside the airport.
The airport has not been directly defined under the service tax provisions. It is taken to have the sme meaning as is assigned to it by the Airport Authority Act, 1994, which while defining the term 'airport' uses the terms 'aerodrome' and 'aircraft' as defined in Aircraft Act, 1934. Following are the relevant definitions:-
'Airport' has the meaning assigned to it in clause(b) of Section 2 of the Airport Authority of India Act,1994 (Section 65 (3c) of the Finance Act, 1994)
.
'Airport' means a landing and taking off area for aircrafts, usually with runways and aircraft maintenance and passenger facilities and includes aerodrome as defined in clause (2) of Section 2 of the Aircraft Act, 1934. (Clause (b) of Section 2 of the Airport Authority of India Act, 1994).
'Aerodrome' means any definite or limited ground or water area intended to be used, either wholly or i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ssed above. Accordingly, the applicability of the category of airport service to the instant transaction can be ruled out.
Based on the above discussion, it may be seen that the advance received by DAPL from the licensees for development of common facilities by DAPL, does not sell under any of the taxable service category, therefore, there is no service tax exposure on the instant transaction.
C. Whether refundable deposits received by DAPL from the licensees for overall development of infrastructure facilities are liable for service tax?
The refundable deposits received by DAPL for overall development of infrastructure facilities would not attract service tax liabilities as the basic activity of such development would not attract service tax as per the above discussion.
6. The Office of Commissioner Service Tax, vide letter dated 16.05.2011 in response to inquiry made by M/s Aria, opined that Service Tax was payable on License Fees, for Development Right for the purpose of hot
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nting of immovable property services. However, the matter has been referred to Board Office for confirmation. But, no confirmation from Board was received by the Appellants. It is claimed by the appellant that the Development Agreement was duly enclosed by M/s Aria Hotels, while seeking clarification from Chairman CBEC, vide letter dated 11.07.2011. Similarly, letter dated 17.07.2012 to Commissioner, Service Tax clearly indicates that Development Agreement dated 04.07.2009 was duly enclosed. Even the notes to clauses of the Development Agreement, in Notes to Clauses No.1.1.39 clearly refers to and defines „Infrastructure Development and Services Agreement', even Para 6.1.2 also has a clear reference to 'Infrastructure Development and Services Agreement'. The relevant portion of the said Para 6.1.2 is extracted below:-
“Provided that the Developer shall, subject to the terms of the 'Infrastructure Development and Service Agreement', be solely responsible to seek connection of, pr
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ter completion of investigations based on facts narrated in preceding paras, Show Cause Notice dated 10.10.2014 was issued by the Additional Director General, DGCEI (Hqrs), New Delhi under F. No 574/CE/41/20/Inv./ Pt.II/11327 dated 10.10.2014. The said Show Cause Notice was adjudicated by the adjudicating authority on contest vide the impugned order wherein demand of Rs. 54,31,68,584/-(Fifty Four Crores Thirty One Lakh Sixty Eight Thousand Five Hundred Eighty Four) was confirmed, interest demanded under Section 75 and penalties under Sections 77 and 78 of Finance Act, 1994 were imposed. Hence the present appeal.
8. Sh Somesh Arora, Advocate, Ms Mehak Gupta and Sh A.S. Hasija, Consultant appeared for the appellant and Sh Amresh Jain, DR, appeared for Revenue.
9. Heard both sides and perused case records, oral and written submissions made and the case laws.
10. The issue before us is whether 'Advance Development Cost' received from Developers towards development of common infrastructu
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
omplex or estate, but does not include –
(a) vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes;
(b) vacant land, whether or not having facilities 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 purposes of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for residential or any other purposes shall be deemed to be immovable property for use in the course or furtherance of business or commerce;
11. We observe that granting of License to the Developer for the Asset Area and Development of Common infrastructure facilities, outside the Asset Area,
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
of various services, -both are in relation to real estate which were not part of Asset Area-3 and are related to Common and Public Area with no exclusive right being conferred. Under the OMD Agreement entered between the appellant and AAI, appellants had responsibilities to adhere to various construction norms, civil aviation security norms and norms of master plan of Delhi Government and of other agencies. Therefore, even while allowing development rights to developers in allocated development area, as per norms and approved plans, for common areas, it had to perform supervisory role to develop facilities as per approved plans. Since it was the appellant's responsibility, as a privy to contract under OMD Agreement, to be responsible for operation management and development. In terms of the agreements such common facilities could not have been developed by any developer for everyone including members of public. Therefore, only the appellant was responsible to do the same. It is hard to
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ivities performed prior to amendment of Section 67 w.e.f. May 14, 2015, can not include the value of goods and services, cost of which is only defrayed or reimbursed to the appellant even in advance, in terms of IDSA, The Department has failed to show, if any portion was retained by the Appellant as its remuneration for alleged services provided. Reliance in this regard is placed on 2018 (10) G. S. T. L. 401 (S. C.), in the matter of Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. (Para 16, 22, 24, 25 and Para 29). The relevant paras are extracted below;
16. Mr. J.K. Mittal, Advocate, appeared for M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. He argued with emphasis that the impugned judgment of the High Court was perfectly in tune with legal position and did not call for any interference. At the outset, he pointed out that the Parliament has again amended Section 67 of the Act, by the Finance Act, 2015 w.e.f. May 14, 2015. By this amendment, ex
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
o be included for computing the service tax”.
22.Section 66 of the Act is the charging Section which reads as under:
“there shall be levy of tax (hereinafter referred to as the service tax) @ 12% of the value of taxable services referred to in sub-clauses of Section 65 and collected in such manner as may be prescribed.”.
24.In this hue, the expression 'such' occurring in Section 67 of the Act assumes importance. In other words, valuation of taxable services for charging service tax, the authorities are to find what is the gross amount charged for providing 'such' taxable services. As a fortiori, any other amount which is calculated not for providing such taxable service, cannot form part of that valuation as that amount is not calculated for providing such 'taxable service'. That according to us is the plain meaning which is to be attached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
In the present case, the aforesaid view gets strengthened from the manner in which the Legislature itself acted. Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended vide Finance Act, 2015, with effect from May 14, 2015, whereby Clause (a) which deals with 'consideration' is suitably amended to include reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. Though, it was not argued by the Learned Counsel for the Department that Section 67 is a declaratory provision, nor could it be argued so, as we find that this is a substantive change brought about with the amendment to Section 67 a
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ers in its provenance, layout and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof.
Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. Our belief in the nature of the law is founded on the bedrock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit : law looks forward not backward. As was observed in Phillips v. Eyre [(1870) LR 6
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Bench (same composition) in the matter of Premium Real Estate Developers, Rajat Yadav Vs. C. S. T. Service Tax, Delhi, Final Order No.53322-53323/2018 dated 30.09.2013, where the issue before the bench was relating to Advance receipt by the Appellants for purchase of land, Development of Land and Registration of land. The Settlement of the Accounts was still to take place and the exact component of consideration of alleged service received was still to be ascertained. The Department was of the view that advance received by the appellant itself was taxable in its hand as per Section 67. Disagreeing with the proposition, and giving relief to the party the bench observed as follows:
'Para 29. We feel that since the specific remuneration has not been fixed in the deal for acquisition of the land we are of the view that both the parties have worked more as a partner in the deal rather than as an agent and the principle, therefore we are of the view that taxable value itself has not acquire
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Reliance in this regard is also placed on the decision of this Tribunal Bench- Chennai, in the case of Commr. Of C.Ex. & S.T, Madurai Vs Sashwath Construction Pvt Ltd-2018 (10) GSTL 273 (Tri-Chennai) wherein it was held-
Construction of Residential Complex Service,-Amount received by builder from allottees under category 'easement rights' for using certain common area-Taxability of-Order of authorities below holding amount being relatable to construction and land value, hence not taxable, sustainable especially when Revenue not challenged such finding on merit but only contested that the same is beyond the scope of show cause notice-Amount received for easement rights held not taxable-Section 65 (30)(a) and 65 (105) (zzzh) of the Finance Act, 1994.
14. Development of Common Infrastructure facilities outside Asset Area cannot be construed as 'Renting of Immovable Property' or a service in relation to the renting of immovable property. The treatment of reimbursement of cost, of common
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
cannot encompass anything done for development of the common facility/ property. There is difference between anything done in relation to 'renting of immovable property service' and anything done in relation to 'immovable property' per-se, which is in common domain. The latter cannot fall within the ambit of the former,
15. From the definition of Renting of Immovable Property Services as contained in Section 65(105)(zzzz), (reproduced above), it is evident that in order to be covered under renting of immovable property services, the nature of the activity should be that of renting or letting or leasing or licensing or other similar arrangements of immovable property for use in the course or furtherance of business.
A perusal of the definition of the word 'renting' shows, that the transaction should be under any tenancy, lease, license or any other similar agreement arrangement, whereby an immovable property is given for use to the service recipient. It would be worthwhile to conside
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nsferee who accepts the transfer on such terms.”
Section 52 of the Indian Easement Act, 1882 reads;
“License Defined-Where one person grants to another, or to a definite number of other persons a right to do, in or upon the immovable property of the grantor, something which would, in the absence of which, be unlawful and such right does not amount to an easement or an interest in the property, the right is called license”
Section 105 of Transfer of Property Act,1882 defines a lease of immovable property as a transfer of a right to enjoy such property made for a certain time in consideration for a price paid or promised. Under 108 of the said Act, the lessee is entitled to be put in possession of the property. A lease is therefore a transfer of interest in the immovable property. The transfer of interest is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease and it follows from it that the lessee gets that right to the e
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
perty by way of tenancy, lease, license etc. It also includes any other arrangement of similar nature. In order to understand the scope of 'any other arrangement of similar nature' the rule of ejusdem generis is to be applied. A lucid illustration from Salmond on Jurisprudence Twelfth Edition, page 135, is extracted with advantage;
“This (i.e the rule of ejusdem generis) however, is only the application of a common sense rule of language. If a man tells his wife to go out and buy butter, milk, eggs and anything else she needs, he will not normally be understood to include in the term 'anything else she needs' a new hat or an item of furniture”
The words used together should be understood as deriving colour and sense from each other. The rule of ejusdem generis is generally invoked where the scope and ambit of the general words which follow certain specific words (which have some common characteristics and constitute a genus) is required to be determined. By the application of this r
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
fixed periodical return. It cannot encompass Development and Maintenance of common facilities, which was to be defrayed on the basis of actual expense incurred. Again lease involves transfer of rights by transferor to the transferee. In this case, there is no right vested in immovable property to be transferred to Developer, again for License a right is required to be conferred to do or continue to do something upon the immovable property of the granter. In this case however, the common area is meant for public use and such immovable property is neither the property of DIAL nor the developer. The road network, metro facilities, etc. are for the general/common use of public and confer any rights, neither on DIAL nor on any Developers. Advance Development Cost is not consideration for any services rendered. In this regard a fine distinction has been drawn by this Tribunal, „As to what amounts to Services having connection with the Renting of Immovable Property and the services whi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
a) the charges collected to undertake various municipal functions like Fire Services, Public amenities, public conveniences including street lightings, parking light, were in the nature of services to be provided by the municipalities and were liable to tax under Management Maintenance and Repair Services in respect of charges collected from allottees., even when within specified industrial area and not outside, it was regarded not as 'Renting of Immovable Property Service,' but as 'Management Maintenance and Repair Services'. Therefore, by no sense of imagination, the Common Area Services outside 'Asset Area' can be regarded as Renting of Immovable Property Services.
Reliance in this regard is also placed on the matter of RICO LTD. VS. COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I-2018 (10) G. S. T. L. 92 (Tri. Del):
17. We find that there is no Service Provider-Service Recipient relationship between the appellant and the Developers, as regards the Advance development cost, because comm
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
to renting of immoveable property. Development of common infra outside asset area cannot be said to be in relation to renting of immoveable property, as no interest in common area is transferred under IDSA to developer. In fact the services which can be in relation to renting of immoveable property are in the nature of broker services etc., and not infrastructure facilities which become part of immoveable property in common areas. In fact Section 65(105)(zzzz) explanation 1 sub clause 4 includes within the ambit of immoveable property, only such common areas and facilities which are within complex of such estates. The area outside and common facilities outside such area, are certainly not included. Advance development cost is not consideration for any services rendered, therefore, Section 67 has been improperly invoked to take gross value as consideration for alleged services provided, even when whole of the deposit is liable to be spent and nothing retained as per the IDSA agreement.
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
surance Co. Ltd. vs. CCE, Pune.
19. In any case the development of land or common facilities for commercial exploitation and usage by public cannot be termed as Renting of Immovable Property as it is the case of Land Development. Reliance in this regard is placed on 2015 (37) STR 859 (Tri. Del.) as confirmed in 2015 (040) STR J132 (S. C.) in the matter of Alokik Township Corporation Vs. Commissioner of Central Excise and Service Tax, Jaipur-I. (Para 7 and 7.1) :- In which matter construction of sewerage line, laying of underground water supply pipe line or of overhead water tank, construction of dividers and footpath along with plantation were clearly held as activities relating to land development. Number of activities performed in the instant case in relation to land like levelling of land and preliminarily development, boundary wall, construction of road as per norms, landscape garden, construction laying of open and underground drainage, water management, footpaths, construction
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
present case and the demand, if any, is time barred. We find that there is nothing brought out on record that the appellant had any intent to evade payment of Service Tax on the consideration paid by the Developers for renting, as alleged. In fact the Appellant had paid Service Tax on the consideration being Licence Fees. There appears no suppression as everything was revealed and was available on Balance Sheet submitted to the Department during Audit conducted from July, 2012 to 2013 and also the same were reflected in ST-3 Returns. It is clear that the appellant nurtured a bonafide belief and it involves interpretation The Department was also not clear on the matter, as is clear from various correspondences discussed in the preceding paras.. Reliance in this regard is placed on: 2016 (42) STR 634 (Cal.): in the matter of Simplex Infrastructure Ltd. Vs. Commissioner Service Tax, Kolkata-Extended period not applicable- when assessee is diligent in responding to all notices issued by t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
pinion was not final. On 18.11.2011 an Assistant Commissioner after visiting the site gave the opinion that tax was dischargeable as renting of immovable property. Again on 08.02.2012 an Assistant Commissioner opined that 'Licence Fee is taxable as Airport Service'. Lastly on 02.05.2012 Deputy Commissioner of Service Tax on re-examination gave opinion that the alleged service is taxable as renting of immovable property but at the same time the matter has been referred to the Board Office. Till date no clarification from the Board has been received. It is thus clear that the matter involved both physical verification as well as examination of legal issue on which even within the Department different sets of opinion existed. Again, all agreements IDSA and Development Agreement were entered from June, 09 to Feb, 2010 i.e prior to date of lease rent of vacant land becoming taxable Renting of vacant land was brought under service tax net w.e.f. 1.07.2010. Therefore, no tenable assertion can
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
7 had clearly indicated that the advances received towards Development of basic common infrastructure facilities were not liable to service tax either as 'Renting of Immovable Property Services' as they do not vest any exclusive right in any immovable property in creation of common facilities or 'Business Support Services or 'Airport Services'. Even when 'Renting of Immovable Property w.e.f. 01.07.2010, included vacant land, the opinion has remained relevant because no exclusive right stood vested in creation of common facility.
d. Again as far as non- taxability of Advance Development Cost is concerned, appellant had acted on legal opinion given by PWC which had clearly opined in 2007 that since what has been developed was infrastructure for common facilities and no exclusive rights has been vested in one or any developer. Therefore, such ADC was not taxable as renting of immoveable property. The reasoning given by the PWC in its opinion dt.09.07.2007 continues to be valid even after
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =