Page 152 - GSTL_11th June 2020_Vol 37_Part 2

238 GST LAW TIMES [ Vol. 37
ure to issue an invoice) Rule 6 (failure to deposit service tax) and Rule 7 (failure
to submit returns) of Service Tax Rules, 1994. After following due process, the
Principal Commissioner of Customs, Central Excise and Service Tax, Bhopal by
the impugned order dated 20-7-2016 confirmed the demands and interest and
imposed penalties, as proposed. Aggrieved by this order, the present appeal is
filed.
5. The Learned Commissioner does not dispute the fact that the nature
of agreement between the appellant and MPWLC was that of a joint venture. In
fact, the show cause notice itself asserts that it is a joint venture. He also notes the
appellant’s defence made before him as follows :
(i) No service was provided by them to MPWLC and it was only a joint
venture with an agreement to share profits. Simply because they are
sharing profits in the joint venture it does not amount to providing
any service;
(ii) The appellants have taken an insurance policy on stock lying in
warehouse which goes to show that they were in the business of
warehousing and are discharging their share of responsibilities.
Similarly, MPWLC was discharging their share of the responsibili-
ties.
(iii) Without prejudice to the above, MPWLC, the alleged service recipi-
ent was not using the property in the course of furtherance of busi-
ness or commerce and thus, the transaction does not fall within the
taxable service of renting of immovable property. In fact, MPWLC is
an autonomous organisation created by the State Government and
CWC in order to provide warehousing facilities for agriculture pro-
duce of the farmers;
(iv) If at all service tax is payable the calculation is erroneous because
the amounts received should be taken as inclusive of service tax;
(v) No interest is payable by them because no service tax is payable at
all at the first place. Similarly, since there are no violation of the law
and hence no penalty is imposable.
Further, even if it is held that the tax is payable, Section 80 of the Finance Act,
1994 provides that no penalty shall be imposed on the assessee for any failure
due to reasonable causes. They are clearly covered by this provision of Section
80.
6. The Learned Commissioner narrated the provisions of Section
65(90a) of the Finance Act (renting of immovable property) and Section
65(105)(zzzz) of the Finance Act, 1994. After examining the agreement entered
into between the appellant and MPWLC and other documents, he observed that
MPWLC had deduced the TDS under Section 194(1) of the Income-tax Act which
pertains to deduction on account of rent. He thus held that MPWLC also treated
this amount as rent and not as profit sharing. Otherwise, MPWLC was not re-
quired to deduct TDS. He, therefore, concluded that service tax has to be paid on
this amount and, accordingly, confirmed the demand along with interest.
7. Learned Counsel for the appellant submits at the outset that on the
same issue, for the earlier periods, this Bench vide Final Order No. 57998-
57999/2017, dated 7-11-2017 and Final Order No. 50903/2018, dated 23-2-2018
had decided the matter in their favour. Accordingly, this appeal may also be de-

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