Gujarat Eco Textile Park Ltd Vs C.C.E. & S.T. (CESTAT Ahmedabad)
The brief facts of the case are that the appellant M/s Gujarat Eco Textile Park Limited floated integrated textile park under the scheme of integrated textile parks (SITP) formed by the Government of India (Ministry of Textiles). The appellant is Special Purpose Vehicle (SPV) a public private partnership. The appellant SPV was formed for acquiring land and setting up infrastructure for establishing textile parks wherein different member textile unit could operate. The Ministry of Textiles had engaged IL & FS as Project Management Consultant (PMC) for implementation of scheme. The said PMC reports to Ministry of Textiles. Ministry of Textiles supervises the operation of the parks through said PMC. The SPV also consists of representatives of Local Industries, Financial Institutions, state and Central Government representatives. The appellant company was incorporated on 07.10.2005 under the said module with representation of Ministry and representation of Banks on board of the company. IL & FS prepared detailed project report for the proposed park to be established by the appellant company. The said textile park project of the appellant company was sanctioned and approved by the Ministry in PAC Meeting held on 25.11.2005 and sanctioned letter was issued on 30.12.2005. The draft of share subscription agreement and lease deed was executed with M/s Radiance Spun Bond Private Limited became the first member of the project, thereafter numerous other members joined textile parks as member and entered into share subscription agreement and lease deed periodically. In terms of the scheme the member unit intending to establish other factor in the said park, executes share subscription agreement with SPV and became member of SPV. On becoming member, they were entitled to allotment of a parcel of a land and access to other common facilities at the park. Subsequent to the execution of the share subscription agreement the member units and SPV entered into lease deed for allotment of land situated in the park. The appellant received the following payments during the execution of the aforesaid agreements from the member units.
A. The member unit pays to the SPV price of the equity share purchased by him for becoming an equity shareholder of the SPV.
B. The member unit pays to the SPV rent for allotment of parcel of land.
C. The member unit pays to the SPV non-refundable contribution towards capital expenditure of the park for developing and constructing the infrastructure in the park.
D. Usage charges and variable expenses are also liable to be paid by the member unit to the SPV on the basis of the consumption of common facilities and utilities.
1.1 On account of purchase of equity shares the unit becomes member of the SPV. The non-refundable contribution given by the members is invested and used for construction/ development of infrastructure and common facilities in the industrial park as the scheme. The amount collected as rent and user charges/ variable expanses from the members are treated as consideration for rendering service in nature of renting of immovable property and other miscellaneous services and appropriate service tax has been paid by the appellant. Now the Revenue sought to demand service tax on the non-refundable contribution made by the member units towards the expenditure of the park for developing and constructing the infrastructure under the category of “renting of immovable property service”. The case of the department is that rental amount is collected in guise of non-refundable contribution which is nothing but service charge against renting of immovable property service hence, liable to service tax.
2. Shri Paritosh Gupta, Learned Counsel appearing on behalf of the appellant, at the outset, submits that the issue in the present case is absolutely identical to the case of the appellant which was decided by this Tribunal vide Order No. A/11729/2019 dated 12/09/2019. He submits that in the present case there is no change of circumstances and the fact the only difference is the present demand is periodical for the subsequent period, therefore, the issue remain the same. He submits that in view of the said judgment of the Tribunal demand in the present case is not sustainable. In addition, he further submits that service tax is even otherwise not payable as service, if any, has been rendered by the SPV which is an incorporated entity to its members, therefore, it cannot be said that any service exists between the incorporated entity and its own members. On this submission he relied upon the Hon’ble Supreme Court judgment dated 03.10.2019 in the case of State of West Bengal vs Calcutta Club Limited 2019 (29) GSTL 545 (SC).
3. Shri H.K. Jain, Learned Assistant Commissioner (Authorized Representative) appearing on behalf of the Revenue reiterates the findings of the impugned order. He also filed a written submission dated 18.01.2021 and argued the same. In support of his argument, he also placed reliance on the following judgments:
