Ruchi Infrastructure Ltd. Vs CCE, Indore (CESTAT Delhi)
Summary: The Customs, Excise and Service Tax Appellate Tribunal, New Delhi, Principal Bench, considered two appeals involving the common issue of liability to Service Tax under the category of “renting of immovable property”. The appeals concerned premises owned by Ruchi Infrastructure Ltd. and an agreement entered into with M/s. Madhya Pradesh Warehousing Logistic Corporation, a Madhya Pradesh State Government undertaking created by a State Act, 1962.
The appellant owned various premises capable of being used for warehousing facilities. The appellant and the Warehousing Corporation entered into an agreement described as a Joint Venture agreement in partnership for specified purposes. Under the arrangement, the appellant provided its premises for storing goods brought by depositors, while the Warehousing Corporation undertook warehousing and related activities. The Revenue took the view that the consideration received by the appellant from the Warehousing Corporation was liable to Service Tax because the appellant’s premises were effectively rented to the Warehousing Corporation for use in business or commerce.
The Original Authority held that the appellant was liable to pay Service Tax and also imposed penalties under Sections 76 and 77 of the Finance Act, 1994 and, in one appeal, under Section 78.
