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r / 1/19477/2019

File NO.APPL-COMMOST/640/2019-GST - APL-CHD

OFFICE OF THE COMMISSIONER (APPEALS), CENTRAL GOODS & SERVICES TAX COMMISSIONERATE,CHANDIGARH, C. R. BUILDING, PLOT NO. 19, SECTOR 17-C,

CHANDIGARH, PH. 0172-2720240.

C. No. 154/A/ST/CHD/2017-181 ~ated:~/05/2019 Appeal Nos.154/2017-18, 155/2017-18, 156/2017-1Ya-e ::--l\X. --I & 157/2017-18 .' ~Ga p '. , . c-- \

\ "

ORDER-IN-APPEAl I

~q --3cl- Final Order No. : CHD-EXCUS-OOI-APP- -2019-:!Q Dated :!2gIOS/2019

These four appeals have been filed by Mis. Shalimar Estates Pvt. Ltd., H.No.10S4, Sector 8C, Chandigarh (for brevity "the appellants") against Order-in-Original No, CSi- 12/ST/ADCICHD/2017-18 dated 31.10.2017 (for brevity the "impugned order") passed by the Additional Commissioner, GST & Central Excise Cornmissionerate, Chandigarh (for brevity l'lc; "adjudicating authority"). As these four appeals are directed against the same Order-in-Or: ;;i:!w! ':1 respect of the appellants, these are being taken up together for decision in a com. -:'Ol~ sit<:,:; i. <.:~':

S, Appeal Show I ---, Name of the Cause Period Amount Ilel~a~tD~~s_ I

Nc No. Appellants Notice No. & of of Service U/S.77, 7(} s: 76 ---~'--I U/", I

date Dispute Tax of the Finance Act, : 7!J

confirmc 199,L d(Rs.)

I. 154/20 Mis Shalimar V(ST) 15/C 01.02.20 97,68,5161 10,0001- U/S. 77 97,68,5 17-18 Estates Pvt. Ltd., E/ADJ/39/2 09 to - 16/- I

H.No.1084, Sector 014/743-47 31.03.20 8C, Chandigarh dated 12

22.4.14 2. 155/20 Mis Shalimar V(ST)15/C 2012-13 70,63,2291 10,0001- U/S. 77+ - l 17-18 Estates Pvt. Ltd., E/ADJ/59/2 - 20,0001- VIS. 70 &

I H.No.1084, Sector 014/880-84 Rs.l OCI- per GJy or I I

8C, Chandigarh dated 1% cf thcir lia~ilit)· I I I

27.05.2014 whichever is l:iJ: . cr i I I

VIS 76 .--i-.-----j 3. 156/20 Mis Shalimar V(ST)ADCI 2013-14 94,79,n51 10,0001- VIS. 77( I) I - :

17-18 Estates Pvt. Ltd., 2015/708- - (a) and Rs. 10,0001- H.No.1084, Sector 10 dated U/S.77(1)(c) 8C, Chandigarh 23.04.2015 Rs.l 001- per day or

1% of their liability

I whichever is higher U/S 76

4. 157/20 Mis Shalimar V(ST)15/C 2014-15 93,83,1511 10,0001-+ 20,00Oi- - 17-18 Estates Pvt. Ltd., E/ADJ/21/2 - VIS 70 & Rs.l 001- I

H.No.1084, Sector 016/07-09 per day or 1 % of 8C, Chandigarh dated their liability I

06.04.2016 whichever is hi~I;:: ! VIS 76 J ___ . __

2. Brief facts of the case arc that, the

'Management, Maintenance & Repair S

r~:;i~~ered with the ,J~~::~! .. t'y.j.::!'J t ti \" ~ ()~' Immovable Properly Scr ,,:~ :~:' : "J;;!' Section 65(l05)(zz7?:) m:s ~ -c..:

File No.APPL-COMMOST/640/2019-GST - APL-CHD 9 .. ,1..7,7/2019

,Q .

65(105) (zzg) respectively of the Finance Act, 1994 (for brevity 'the Act') till 30.06.2012 and thereafter taxable under Section 66B of the Act, being declared service.

3. An enquiry was initiated by the officers of the Anti-evasion wing of Central Excise & Service Tax Commissionerate, Panchkula against the Appellants for non-payment of Service Tax on the services of 'Renting of Immovable Property' and 'Repair and Maintenance Service' in respect of premises of MIs Shalimar Mall, Sector 5, Panchkula. During the course of enquiry it was observed that the appellants have got centralized registration at SCQ 110-11, Sector 8, Chandigarh. Therefore, the case of the appellants was transferred to Central Excise & Service Tax Commissionerate, Chandigarh. During the period from February, 2009 to 31.03.2012, the appellants had received Rs.4,32,61,654/- from renting of immovable property on which they had calculated the service tax of Rs.44,55,9501- on the services of renting of immovable property provided to the tenants other than Mis Reliance Retails Ltd.vFurther, the appellants submitted that they had not received any amount from Reliance Retails Ltd. against the services of 'renting of immovable property' provided to them during the relevant period. However, vide Service Tax (Amendment) Rules, 2011 and with the introduction of Point of Taxation Rules, 2011, service tax became payable when the invoice for the service provided or agreed to be provided is issued or where the invoice is not issued, the point of taxation would be the date of such completion. It was also observed that in the statement of Profit & Loss Account for the year ending 31.03.2012, under the head 'other income', the appellants had shown rental income of Rs.4,12,10,8801- from Mis Reliance Retails Ltd. on which no service tax has been paid by the appellants. Therefore, service tax amounting to Rs.87,00,6711- (Rs.44,55,9501- + Rs.42,44,7211-) on the taxable value of Rs.8,44,72,534/- (Rs.4,32,61,654/- + Rs.4,12,10,8801-) on account of 'renting of immovable property' was recoverable from the appellants. During the course of investigation, the appellants had deposited an amount of Rs.37,00,0001- towards their service tax liability in respect of 'renting of immovable property'.

4. Further, it was observed that the appellants were also providing services of 'Management, Maintenance & Repair' but till 24.05.2010 they were neither registered with the department nor were filing ST-3 returns. From the documents supplied by the appellants in respect of Maintenance & Services, it was revealed that during the period from February, 2009 to 31.03.2012, the appellants had received Rs.2,33,40,6311- on account of taxable service of 'Management, Maintenance & Repair' provided to clients other than Mis Reliance Retails Ltd. and service tax amounting to Rs.10,67,8451- (Rs.6,90,8901- + Rs.3,76,9551-), short paid by them on account of 'Management & Repair Services' appeared to be recoverable from the appellants.

5. From the above, it appeared that the appellants had evaded the payment of Service tax amounting to Rs.97,68,5l6/- (Rs.87,00,6711- on account of 'renting of immovable property' + Rs.lO,67,8451- on account of 'Management & Repair Services') which was recoverable from them under Section 73(1) of the Act alongwith interest under Section 75 of the Act by invoking extended period of limitation. They had also rendered themselves liable to penal action under Section 76, 77 & 78 of the Act. Accordingly, the appellants were issued Show Cause Notice C. 1'-:0. V(ST)15ICE/ADJ/39/20141743-747 dated 22.04.2014 for recovery of Service Tax amounting to Rs.97,68,516/- under Section 73(1) of the Act alongwith interest under Section 75 of the Act by invoking the extended period of limitation. Penalty under Sections 76, 77 & 78 of the Act were also proposed. Since the appellants continued the same offence in subsequent period 2012-13, 2013-14 and 2014-15, Show Cause ice dated 27.05.2014 and statement dated 23.04.2015 and dated 06.04.2016 for recove . 'j;p. x amounting to Rs.70,63,7.291-, Rs.94,79,2851- and

99 s t~-:' 93,83,1511- respectively und ~l~'.,~ e Act alongwith interest under Section 75 of the Act

'R l.fij were issued to them. Penalty ' . .§ler 7kon ~ 76, 77 & 78 of the Act was also proposed. ~ji 'i..;.~ ~~ f,l""9< 7r~ UJ<rcf I {!:/

"0 .•.• ,,'" * Ch'nd,oa'\" ~ (I

2

File No,APPL-COMMOST/640/2019-GST - APL-CHD 9

"'_ 477/2019

6. The adjudicating authority vide impugned order confirmed the recovery of service tax alongwith interest and penalty as detailed above. He also appropriated the amount of Rs.37,00,0001- deposited during investigation.

7. Being aggrieved, the appellants have filed the instant appeals against the impugned order on the identical grounds which are summarised as under :

7.1 That the appellants had never received copy of Show Cause Notice alongwith relied upon . documents. Further, on perusal of impugned order it was observed that the SCN had been sent at address SCQ No.lIO-lIl which was sealed by the Chandigarh Administration. Since the Show Cause Notice has not been served to the appellants, the Ex-party order passed by the adjudicating authority is not sustainable and liable to be dropped in the interest of natural justice. In this regard, reliance was placed on the following judgements ofHon'ble CESTAT in the case of:

• Raja Sethi Financial Services V s. Commissioner of Central Excise, Harpur- 20 17( 49)STR 432(Tri. All);

• J.B. Textile Industries Pvt. Ltd. Vs. Commissioner of Central Excise, Thane-II- 2007(219)ELT 458(Tri.-Mumbai)

• Merchant Impex Vs. Commissioner of Customs, Bangalore- 2009(15)STR 504(Tri.-Bang)

7 .. 2 That the hearing notice with regard to personal hearing in the matter was not served upon the authorized person of the appellants. The Director of the appellants was in jail during the dates of personal hearing as mentioned in the impugned order. Thus, the impugned order defies the principals of natural justice for passing the ex-party order without affording the opportunity of hearing to the appellants to defend their case. Reliance in this regard was placed on the following judgements:

• Kasturi Lal Gulati Vs. Commissioner of Customs, New Delhi- 2001(128)ELT 84(Tri.Del) • Regent Overseas Pvt. Ltd. Vs. Union oflndia- 2017(6)GSTL 15(Guj)

7.3 That renting of immovable property does not fall within the purview of a "Service". The Parliament does not have the competence to include 'Renting of Immovable Property' as a taxable service under entry 97 of List 1 of VIIth Schedule to the Constitution of India. Entry 92C which was introduced in 2003 also makes clear that the intent of the Union Govt. is to tax services. The term' Services' cannot be understood in a manner so as to include within it Renting of Property; a term used by the department compendiously as including activities such as renting, letting, leasing, licensing, etc. of immovable property. Hence, such activities cannot be encompassed under the term services. The power to impose any tax on these activities cannot be attributable to Entry 97 of List-I as 'Renting' in all its instantiations such as renting, leasing, letting etc. is in essence a transfer of rights appurtenant to land, and does not amount to a service rendered by one person to another. The lessor or the Licensor is not a service provider, but a transferor of rights appurtenant to the immovable property in favour of the prospective customer or the licensee. In so for as the entry of 'Renting of Immovable Property' seeks to bring within its scope of transfer of rights appurtenant to land, the same is beyond the scope of Entry 97. Reliance was placed on the judgement of Delhi High Court in the case of Home Solutions Retails Ltd. Vs. UOI-2010(19)STR- 3.

3

File No.APPL-COMMOST/640/2019-GST - APL-CHD 9 I ,9 ,1/20 9

7.5 That the tax on leasing, renting, letting or other similar arrangements in respect of immovable property for use in the course of furtherance of business or commerce is, in pith and substance, a tax on land and buildings. Taxes on land and buildings fall within the exclusive legislation competence of the States in terms of Entry 49 of List II of the VIIth Schedule to the Constitution of India.

7.6 That introduction of entry of 'Renting of Immovable Property' is thus, a colourable exercise of legislative power by the department to impinge on the exclusive legislative domain of the States in the garb of service. By Section 65(105)(zzzz) the service tax is being charged on the

: ';~:: ','-.' ,'i's;~rvice provided by one person to another by way of renting which in effect a 'use' which has been made the basis to tax the land or building which is exclusive domain of state legislature under Entry 49 of List II. Thus, a tax is in effect a tax on land or building though its incidence depends upon when the land or building is rented out and that the charge arises only when the land is rented out. Reliance was placed on the judgement of Hon'ble Supreme Court in the case of Ahoy Kumar Mukherjee Vs. Local Board of Barpeta - 1965 3SCR 47.

7.7 That the leasing rights are rights integrally connected and arising from land and building. The lease is inalienable from land and building and a tax on such leasing is a tax on land or building under entry 49 of List II and therefore, ultra-virus Article 246. Moreover, charging of service on leasing/licensing of vacant land for construction of building or temporary structure which are to be used in furtherance of business or commerce cannot be within the legislative competence of Union of India being specifically covered under Entry 49 of List II of the Seventh Schedule of the Construction of India.

'/.8 . The said entry of 'Renting of Immovable Property' is colorable exercise of legislative power as it impinges on the exclusive legislative competence of the State legislatures under Entry 18 read with Entry 45 of the List II of the VIIth Schedule. 'Renting in all its instantiations such as renting leasing letting etc., is in essence a transfer of rights appurtenant to land and does not amount to a service rendered by one to another. Leasing/licensing/renting or letting out of any premises creates or destroys rights and such creation, extinction and transfer of rights appurtenant to immovable property as also the relations of landlord and tenant and the collection of rent falls exclusively within the domain of the State legislature under Entry 18 read with Entry 45 of List II of the VII Schedule to the Constitution of India. The levy of a service tax under the entry of 'Renting of Immovable Property, in pith and substance, amounts to legislating on a subject which is covered by Entry 18 of List II to Schedule VII to the Constitution of India which is under the exclusive domain of the State. As such said taxable heading is beyond the legislative competence of Parliament therefore, liable to be quashed and set aside.

7.9 The said entry is colorable exercise of legislative power as it impinges on the exclusive legislative competence of the State Legislatures under Entry 63 of List II of VII Schedule. The transactions for the lease of such premises and also transactions for letting out on leave and licence any such premises are being subject to the levy of a stamp duty by respective states, as the same falls within the legislative competence of the State falling under Entry 63 of List II of the VII Schedule. As leasing of immovable property fall within the legislative competence of the States, various States have been providing for rates of stamp duties, as aforesaid, on such transaction on leasing or renting out of the premises. In so far as the Union Parliament attempts under the guise of s" f of impinging upon the State legislative powers under Entry 63, the same is ultra vires

.~' chlff~e0' > tional. IS.;,'/ ~~ -~ ~p .19? ~ hat: 8 is beyond doubt, having recourse to well settled principles of interpretation of

~ ~:QU~~ ti-Rrfll ivision of legislative competence, that the entries in the lists should be given the \(j ~. ~""~

(I c/o; ldiu"" • * ~;;"';~

4

File No.APPL-COMMOST/640/2019-GST - APL-CHD 9 ~J19 'i'7/201 ~. .

wiriest possible sweep and after giving the widest interpretation to the entry if the Act is w.ithin the legislative competence of the State, the Union does not have power or compe~en~e to tax it: In ~he present case, the category of 'Renting of Immovable Property' falls. wlthl~ the leg~slat~ve competence of the State Legislatures. Therefore, the present taxable entry is outside the legislative competence of the Parliament. Reliance was place on the following judgments:

• Ujagar Prints Vs. Union ofIndia - 1989(3) SSC 488 • ITC Ltd. Vs. State of Assam & Others- 2007(9)VST 250

7:'11 That the place of provision Rules becomes effective from 01.07.2011 and before the place of provision rules the service tax was payable on receipt of consideration only in terms of Rule 6(1) of Service Tax Rules, 1996. In the present case, the appellants had not received the consideration from Mis Reliance Retails Ltd. However, the adjudicating authority had calculated the service tax liability on due basis during the period. Therefore, the demand confirmed for the period April, 2011 to June 2011 is not legally valid.

7.12 Since there was no intention to evade the payment of service tax, extended period of limitation cannot be invoked. In this regard reliance was placed on the following judgments:

• Hindalco Industries Ltd. V s. CCE, Allahabad- 2003( 161 )EL T 346(Tri-Del.) • CCE Vs. Chemphar Drugs Liniments- 1989(40)ELT 276 • T.N. Dhanda Pharmaceuticals Vs. CCE- 2003(55)RL T 20 • Continental Foundation Jt. Venture Vs. CCE, Chandigarh- 2007(216)ELT 177(SC) • Mis Larsen & Toubro Vs. CCE, Pune- 2007(2ll)ELT 5l3(SC)

7.13 Since the present issue was subject matter of legal interpretation during the relevant period, the extended period of limitation cannot be invoked. Reliance was placed on the following judgements:

" Home Solution Retail India Ltd.- 200((14)STR 433(Del.) • Euro Ceramics Ltd. Vs. CCE, Rajkot- 2013(32)STR 642(Tri. Ahmd.)

7.14 that since the appellants had provided all the documents during the year 2012 and the department had knowledge of the facts, extended period of limitation cannot be invoked. Reliance was placed on the judgement in the case of Commissioner of Central Excise & Service Tax V s. Triveni Engineering & Industries Ltd.- 2015(317)ELT 408(All.)

7.15 That since the appellants were not responsible for payment of service tax, no penalty under Section 77 & 78 upon the appellants. Reliance was placed on the judgement in the case of M/s Hindustan Steel Ltd. Vs. State of Orissa reported at 1978 ELT (Jl59)

7.16 That Section 80 of the Act was applicable in their case.

S. An application for condonation of delay has also been filed on the grounds that the ~ ell' C d order was received by the son of Director of the Appellants on 13.11.2017, who

'$-~l~ . "'~ authorised person, and he handed over the same to the appellants only on tf }, 1.2 In terms of Section 85 of the Act, the appeal against the impugned order must be ~_~. _ wi". the two months from the date of receipt of the order. Thus, there was a delay in ~ "f,s %>: 1 K' • ~,,~ peal to the extent of 24 days in case the order is considered to be delivered on

*. ~' ~lJ()} 7. They submitted that the delay of 24 days in filing an appeal was caused as the "Directors of Appellant Company were in judicial custody from 11.11.2016 to 12.12.2017 and resumed their office only in third week of January, 2018. The impugned order came to

5

File No.APPL·COMMOST/640/2019·GST· APL·CHD 9 J19477/2019 , /,

their knowledge only on 18.01.2018. They requested to condone the delay of 24 days in filing the appeal for the cause of justice.

9. Personal hearing in the case was held on 22.04.2019. Sh. Mukesh, Pandey, Cost Accountant and authorised representative on behalf of the appellants and Sh. Archit Rana, Asstt. of Sh. Pandey appeared for the same, reiterated the submission as made in their grounds of Appeal and further requested for one week time to submit additional submissions and requested to decide the case in the light of these.

7. I have carefully considered the Grounds of appeal, impugned Order and the detailed submissions already made by the appellants and made at the time of personal hearing in the instant cases. The main issue to be decided by me in the appeal is whether or not the appellants are liable to pay service tax, interest and penalty on the amount received in lieu of taxable services provided under the category 'Renting of Immovable Property Services' and 'Management, Maintenance & Repair service'.

8. I find that the adjudicating authority had confirmed the demand for recovery of service tax under Section 73(1) of the Act by invoking extended period of limitation alongwith interest under Section 75 of the Act and penalty under Sections 76, 77 and 78 of the Act for non-payment of service tax on amount received on account of Renting of Immovable Property Services and 'Management, Maintenance & Repair Service' during the period under reference.

8.1 Further, Service Tax on "Renting of Immovable Property Services" was levied vide Notification No. 23/2007-ST dated 22.05.2007 w.e.f. 01.06.2007 and under Section 65(105) (zzzz) of the Act it was stipulated that the gross amount charged by or gross consideration received by any person, being a service provider, from any other person in relation to property rental services shall be chargeable to service tax. Renting of Immovable Property has been defined under Section 65(90a) of the Act, which reads as under:

(90a) "Renting of immovable property" includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce but does not include - (i) Renting of immovable property by a religious body or to a religious body; or (ii) Renting of immovable property to an educational body, imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre. Explanation l . - For the purposes of this clause, "for use in the course or furtherance of business or commerce" includes use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple-lise buildings

Explanation2.- For the removal of doubts, it is hereby declared that for the purposes of this clause "renting of immovable property" includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the said immovable property.

8.2

x p I a nat ion l : - For the purpose of this sub-clause, "immovable property" includes:

building and part ofa building, and the land appurtenant thereto; land incidental to the use of such building or part of a building;

6

File No.APPL-COMMOST/640/2019-GST - APL-CHD 9 : 1.9477/2019 ,.

(iii) the common or shared areas and facilities relating thereof; and (iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate,

'iut 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 incidental to the use of such land; c) land usedfor educational, sports, circus entertainment and parking purposes and d) building used for residential purpose and buildings used for purposes of accommodation, including hotels, hostels boarding hous es, holiday accommodation, tents, camping facilities.

Explanation 2- For the purpose of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for residential or any other purposes shall be deemed to be immovable property for use in the cuurse or furtherance of business or commerce.

9. I find that the appellants had provided taxable services during the period under reference in respect of "Renting of Immovable Property Services" and had received the payment amounting to Rs.8,44,72,534/- against the services so provided but did not discharge the Service tax liability, due against the amount so received during the material period. They failed to pay the due Service Tax under Section 68 of the Act read with Rule 6 of the Service Tax Rules, 1994(in brief the Rules) and failed to file Service Tax Returns under Section 70 of the Act read with Rule 7 of the Rules and therefore had contravened the provisions under Sections 66, 68 and 70 of the Act read with Rules 4,5, 6 and 7 of the Rules. Therefore, I find that service tax not paid by the appellants is recoverable from them alongwith interest. W.e.f. 01.07.2012 onwards, the Renting of Immovable Property was also taxable being a declared service under Section 66E of the Act.

1 o As regards short payment of service tax on Management, maintenance or repair Services provided by the appellants, I find they are also liable to pay service tax alongwith interest. Management, maintenance or repair Service has been defined under Section 65(64) of the Act, which reads as under:

(64) "Management, maintenance or repair" means any service provided by- (i) Any person under a contract or an agreement; or (ii) A manufacturer or any person authorised by him, in relation to, - (a) Management of properties, whether immovable or not; (b) Maintenance or repair of properties, whether immovable or not; or (c) Maintenance or repair including reconditioning or restoration, or servicing of any goods, excluding a motor vehicle.

Explanation.-For the removal of doubts, it is hereby declared that for the purposes of this clause- (a) "goods" includes computer software; (b) "properties" includes information technology software".

Further, relevant portion of Section 65(105)(zzg) of the Finance Act, 1994 till 30.06.2012 reads as under:

"Taxable Service means any service provided or to be provided "(zzg) to any person, by any person in relation to management, maintenance or repair".

7

File No.APPL-COMMOST/640/2019-GST - APL-CHD 9 19477/2019

of 'Management & Repair Services'), Rs. 70,63229/-, 94,79,285/- and Rs.93,83,1511- is recoverable from the appellants under Section 73 of the Act read with Section 174(2) of the CGST Act, 2017 alongwith Penalty under Section 70,76, 77 and Section 78 of the Act and interest under Section 75 of the Act read with Section 174(2) of the CGST Act, 2017 .

12. The appellants have further contested that extended period of limitation is not invokable in their case as they had not suppressed any material facts from the knowledge of the department. I do not agree with the contentions of the appellants and fmd that they failed to pay the due Service Tax under Section 68 of the Act read with Rule 6 of the Rules and failed to file Service Tax Returns under Section 70 of the Act read with Rule 7 of the Rules and therefore had contravened the provisions under Sections 66, 68 and 70 of the Act read with Rules 4,5, 6 and 7 of the Rules. Therefore, I fmd that extended period of limitation had rightly been invoked in this case as the appellants during the period under reference had suppressed the material facts from the knowledge of the department with an intent to evade service tax and neither intimated the department the amount received nor they had deposited service tax nor filed ST -3 Returns nor complied with other requisite procedures relating thereto.

13. I find that the appellants have further contested that they had already deposited an amount ofRs. 95,32,262/- during the period 2011-12 to 2014-15, however, the adjudicating authority has appropriated only Rs. 37 Lacs. I find that the appellants have submitted copies of Challans, as token of documentary evidence with regard to deposit of above amount. However, the genuineness of the Challans is required to be verified. Therefore, the jurisdictional Deputyl Assistant Commissioner is requested the get the Challans verified and allow the benefit of same to the appellants, in case the Challans are found to be in order.

14. The appellants have contested that penalty under Section 76, 77 and 78 of the Act is not imposable on them as they had not suppressed any facts from the department and in their case, Section 80 of the Act is applicable as there is certain dispute on non-payment of rent between Mis. Reliance Retails Ltd. and the appellants and the matter is pending decision in the Hon'ble Court.

14.1 I do not agree with the above contentions of the appellants and find that they have certainly suppressed the facts of having received rent for providing taxable services under the category 'Renting of Immovable Property Service and 'Management, Maintenance & Repair Service, without payment of service tax, without following the statutory requirements and without filing the statutory ST -3 returns reflecting thereunder the amount so received with an intent to evade payment of service tax. Further, had the department not conducted the investigation, and had not pointed out the discrepancy, it would have remained un-detected and it would not have corne to the knowledge of the department. Therefore, I hold that the appellants are liable to penalty under Section 76, 77 and 78 of the Act the provisions of Section 80 of the Act are not applicable in their case. Further, the case law relied upon by the appellants has not been found relevant to their case.

14.2 I find that ample opportunities were provided to the appellants by the adjudicating authority to represent their case, but of no avail. Further, the appellants even continued to evade service tax and non-compliance of provisions of law during the further period i.e. 2012-13 to 2014-15.

~ 'r~ 1).~1f ;CIltJ',~, e ap~el~ants have also filed r~quest application for Condonation of Delay for 24 , r ,a ~!. ve intimated that the Order III Appeal was received by the son of Director of the ;" co pal!Y. 13.11.2017, who was not authorised; that the Directors of the Company were in ~ ••• c.~~{ ~'1! ,~ ~ •••. "',y

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File No.APPL-COMMOST/640/2019-GST - APL-CHD 9

Judicial Custcdv hom 11.11.2016 to 12.12.2017 and the Order-in-Original came to their knowledge ~:11}; ',:;,; 18.01.2018; that in the process, delay of 24 days was caused and that in view of the unintentional and non-deliberate delay, the delay may be condoned for the cause of justice. I find that the reasons of delay in filing of the instant appeal are acceptable. Therefore, I allow the Condonation of Delay filed by the appellants.

16. It is pertinent to mention that the appellants had not observed the requisite procedures and formalities contained in service tax law and fact of non deposit of the service tax came to the knowledge of the department only as a result of investigation conducted by the department. Thus, once intention to evade service tax is spelt out, penalty as confirmed by the adjudicating authority, under Section 76, 77 and 78 of the Act is recoverable from them and their act of not disclosing the income received in lieu of taxable services provided, itself speaks of their malafide intent to evade payment of service tax.

17. In view of the above facts, the appellants were liable to pay service tax alongwith interest and they were also liable to pay penalty. As such, I find that the appeals filed by the appellants are liable to be allowed partially as discussed in Para No. 13 above.

ORDER

18. In view of the above, the appeals of the appellants are partially allowed as discussed in Para No. 13 above and the impugned order is modified to that extent only. The appeals are disposed of, accordingly. L----

)-<i' J ~-t 2-f1 (Dr. Sqrnan Ba a)

Commissioner (Appeals) REGD.A.D. Mis. Shalimar Estates Pvt. Ltd., H.No.1084, Sector 8-C, Chandigarh. Copy to :- 1. The Chief Commissioner (CZ), Central Goods & Services Tax, Chandigarh. 2. The Commissioner, Central Goods & Services Tax Commissionerate, Chandigarh. 3. The Deputy Commissioner, Central Goods & Services Tax Division-I, Chandigarh. 4. Sh. Pawan Kumar Pahwa, Advocate, # 908, Sector 22-A, Panchkula. 5. Guard file.

Superintendent (Appeals).

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