Page 151 - GSTL_11th June 2020_Vol 37_Part 2

2020 ] RUCHI INFRASTRUCTURE LTD. v. COMMR. OF C. EX., CUS. & S.T., INDORE 237
State and they provide warehousing facility to their customers and charge certain
amounts for this facility.
2. The appellant and MPWLC entered into a joint venture agreement
for providing many warehouses in different parts of Madhya Pradesh where the
appellant had storage facilities and the income generated from the customers is
shared 35% to MPWLC and 65% to the appellant. A show cause notice dated 22-
10-2015 was issued to the appellant by the Department alleging that the amounts
received by them in the aforesaid joint venture is a consideration for ‘renting of
immovable property’ service rendered to MPWLC. Accordingly, it was proposed
to charge service tax on these amounts under Section 65(105)(zzzz) of Finance
Act, 1994. The relevant Sections are as follows :
3. Renting of immovable property service means -
“any service provided or to be provided to any person, by any other per-
son, by renting of immovable property or any other service in relation to
such renting, for use in the course of or, for furtherance of, business or
commerce, [Section 65(105)(zzzz)].
Immovable property means -
(i) building and part of a building, and the land appurtenant
thereto;
(ii) land incidental to the use of such building or part of the build-
ing;
(iii) the common or shared areas and facilities relating thereto; and
(iv) in case of a building located in a complex or an industrial es-
tate, all common areas and facilities relating thereto, within
such complex 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 inci-
dental 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 build-
ings used for the purposes of accommodation, including
hotels, hostels, boarding houses, holiday accommoda-
tion, tents, camping facilities;
(e) vacant land, given on lease or license for construction of
building or temporary structure at a later stage to be
used for furtherance of business or commerce.”
[Section 65(90a)]
4. It is alleged in the show cause notice that the appellant had rented
out their warehouses to MPWLC and received a consideration for the same and
such consideration is chargeable to service tax. Accordingly, a demand of service
tax amounting to Rs. 1,63,82,196/- covering the period January, 2014 to March,
2015 was sought to be recovered under Section 73 of the Finance Act, 1994. It was
also proposed to recover interest under Section 75 of the Finance Act, 1994. Pen-
alties were proposed to be imposed under Sections 76 and 77 of the Finance Act,
1994 for contravention of provisions of Section 68 (failure to pay service tax) and
Section 70 (failure to assess tax due on services) and provisions of Rule 4A (fail-
GST LAW TIMES  11th June 2020  151