In the present case, what is apparent is that the lessee (assessee) paid a substantial amount (Rs. 2.53 crores) in 1989 at the time of entering into the transaction. It was a precondition for securing possession; the amount was one-time consideration in terms of the lease condition. In addition, the lessee has to pay 2.5% of the said amount as annual rent, which is subject to increase periodically. No doubt, the assessee argues that the annual rent is depressed, and does not reflect the market rent.
The appellant was a franchisee of BCCI-IPL and received payment from BCCI-IPL as its share in receipts towards media rights and other income collected centrally by BCCI-IPL. The key issue in the appeal was whether the amount received by the appellant from BCCI-IPL liable to service tax as business support services provided to BCCI-IPL.
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The assessee contested that the impugned activity was a joint business involving no service from one party to other. Therefore in view of CBEC circular 108/2/009 dated 29-1-2009 no service tax arises in such context. The main contention was there that was a joint venture between the landowners and the assessee where profit of the joint venture was shared by both the parties. The landowner made available his land and the assessee did construction activity and constructed flats were divided in a ratio agreed at the time of execution of Joint Development Agreement. It could not be considered that the assessee was providing any service to the landowners. The assessee was paying back the consideration for his share of the land which he bought through the Development Agreement by compensating in the form of flats constructed and handed over to the landowners.
Applicants have availed the taxable services and the persons which were supplied like Yoga teacher, Poojari, Cook, Compounder, Nurse, helper etc. have no direct nexus with manufacture of final product. Therefore, prima facie, we find that the applicant has not made out a case for total waiver of pre-deposit of duty. Hence, the applicant is directed to deposit an amount of Rs.15 lakhs within a period of six weeks. On deposit of the said amount, pre-deposit of the balance amount of duty, interest and penalty shall stand waived and recovery thereof stayed during pendency of the appeal.
If the intention of the legislature was to align the exemption with section 26 of the SEZ Act or Rule 31 of the SEZ Rules, then notification No. 4/2004-ST would have been amended to reflect the same. No such amendment has been carried out in the said notification. In these circumstances, we are of the view that if the services are not consumed within the Special Economic zone, then the benefit of notification No. 4/2004-ST will not be available.
As regards the penalty set aside by first appellate authority under section 76 of Finance Act, 1994, for the quarter ending 30.09.2006, I find from the Form ST-3 return produced by ld. Counsel for the assessee, that the said form specifically indicate the taxable service rendered from April 2006 to September 2006 is Nil. Such return has been filed with the lower authorities on 25.09.2006.
Any order for imposing penalty specially the heavy once qas provided under Section 76 and 77, of the Act should show the reason justifying the imposition of penalty and thus following the principles of justice done. It is a fact on record that the Appellants had asked for clarification regarding availability of benefit of exemption Notification No. 12/2003 dated 20.6.03 from the department time and time again but as no response was made to their request under a bona fide belief of availability of said exemption notification had availed the benefit of said exemption notification.
It is undisputed that the appellant is a State Government entity and has been providing services of testing and certifying the quality of the seeds in the State. We find that the appellant was informed on 01.08.2006 by the office of the Commissioner of Service Tax that their activities would not fall under the category of services rendered and they would not be covered under the Service Tax.
