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Does granting of 'Land Development Rights' by a franchisor, constitute as service to the franchisee?

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Court :
CESTAT Delhi

Brief :
This appeal is directed against the order dated August 29, 2014 passed by the Commissioner of Central Excise and Service Tax, New Delhi , by which the demand of service tax amounting to Rs.5,94,76,320/- not paid on the amount received against development compensation charges and for recovery of same under section 73 ofthe Finance Act 19943 by invoking the extended period of limitation, has been confirmed. The impugned order also holds that the appellant had wrongly availed and utilized CENVAT credit of Rs. 4,99,32,736 /- against the capital goods falling under chapter 73.

Citation :
SERVICE TAX APPEAL NO. 52342 OF 2015

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH

SERVICE TAX APPEAL NO. 52342 OF 2015

(Arising out of Order–in-Original No. 18/Commr./2014-15 dated 29.08.2014 passed
by the Commissioner of Central Excise & Service Tax, Large Taxpayer Unit, New
Delhi)

M/s Mahanagar Telephone Nigam Limited ...…Appellant
1st Floor, Khurshid Lal Bhawan
Janpath, New Delhi

Versus

Commissioner, ...…Respondent
Central Excise & Service Tax,
Large Taxpayer Unit
NBCC Plaza Pushp Vihar
Saket, New Delhi

APPEARANCE:

Shri Puneet Agarwal, Shri Gaurav Gupta and Shri Chetan Kumar Shukla Advocate for
the Appellant
Dr. Radhe Tallo, Authorised Representative for the Department

CORAM:

HON‟BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON‟BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

Date of Hearing: March 18, 2021
Date of Decision: March 31, 2021

FINAL ORDER NO. 51183/2021

JUSTICE DILIP GUPTA:

This appeal is directed against the order dated August 29, 2014 passed by the Commissioner of Central Excise and Service Tax, New Delhi , by which the demand of service tax amounting to Rs.5,94,76,320/- not paid on the amount received against development compensation charges and for recovery of same under section 73 ofthe Finance Act 19943 by invoking the extended period of limitation, has been confirmed. The impugned order also holds that the appellant had wrongly availed and utilized CENVAT credit of Rs. 4,99,32,736 /- against the capital goods falling under chapter 73. The order also confirms the demand of service tax of Rs. 12,56,342 /- not paid on Point of Projection charges received by the appellant. The order also demands interest and has imposed penalty. 

2. M/s Mahanagar Telephone Nigam Limited is a Public Sector Undertaking of the Government of India and is engaged in thebusiness of providing “telecommunication service”. The appellant wasin possession of land measuring 19.76 acres situated at B-3, Institutional Area, Sector-62 Phase-II, Noida, Utter Pradesh. It desiredto develop this land as a Core Knowledge Park and for this purpose itinvited proposals from the bidders for the selection of a Joint Development Partner in implementing the project. IDEB SUCG JV was selected for the project and this Joint Development Partner consistedof two members, with IDEB Projects (P) Ltd.6 being the lead member and Shanghai Urban Construction (Group) Corporation as a member. These two members formed IDEB-SUCG Knowledge Park Private Limited for implementation of the Project. It entered into a Deed of Confirmation and Ratification on August 7, 2007 with the Project Development Company.

To know more in details find the attachment file

 

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on 20 April 2021
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