Refunds of land license fees do not qualify as 'declared services' under Section 66E(e) because they represent cost reversals. CENVAT credit for group insurance and business facility maintenance is admissible as input service, and extended limitation periods require proof of deliberate intent to evade tax.

HEMAMBIKA R. PRIYA

1. The present appeal has been filed by M/s. Delhi Cargo Service Centre Private Limited¹1. the Appellant, against the Order-in-Original No.68/TPS/PC/CGST/DSC/2020-21 dated 09.02.2021 passed by the Principal Commissioner of Central Goods and Service Tax, Delhi South, New Delhi, which confirmed the demand of service tax amounting to Rs.2,70,80,797/-; along with interest and imposed penalty of Rs.2,70,80,797/- under Section 78 of the Finance Act, 1994.

2. The brief facts are that the Appellant were registered with service tax department for rendering taxable services viz., Cargo handling services as defined under Section 65(105) of the Finance Act, 1994. During the course of audit and verification of the records, the Department observed the that the Appellant were providing taxable as well as exempted (services provided to SEZ) services and taking full Cenvat credit without maintaining separate records, nor has reversed such Cenvat credit under Rule 6(3) of the Cenvat Credit Rules. Further on scrutiny of documents, the audit observed that the Appellant had not paid service tax under reverse charge for procuring services of renting of motor vehicle. It was also noted that the Appellant had availed Cenvat credit on bills related to services of rent a cab, health insurance and security services provided at the guest house owned by the Appellant. The Appellant had also availed Cenvat Credit on debit notes which was not prescribed document for taking Cenvat credit. Audit also noted that Cenvat Credit was taken on works contract related to building and civil structures which was inadmissible as per Rule 2(l) of Cenvat Credit Rules, 2004. Further credit notes amounting to Rs.11,29,72,594/- was received towards final settlement of its claim lodged with Delhi International Airport Private Limited²2. DIAL for remission and refund of License fees on account of delay in handling over vacant possession of certain portion of land. Similarly, the Appellant received an amount of Rs.4,15,52,209/- during 2013-14 from DIAL on account of delay in handing over a piece of land. It appeared that the activity of the Appellant for tolerating late handing over of land by DIAL was liable for service tax under Section 66E(e) of the Finance Act, 1994. On scrutiny of documents, the department observed that the Appellant had taken advance from customers, but had paid service tax only at the time of issue of the bill. Thereafter, a Show Cause Notice dated 22.04.2019 was issued to the Appellant for demand of Service tax of Rs.2,70,80,797/- along with applicable interest; interest of Rs.1,05,681/- under section 75 for advance payment received and alleging penalty under section 76,77 & 78 of the Finance Act, 1994. The said show cause notice was adjudicated vide Order-in-Original No. 68/TPS/PC/CGST/DSC/2020-21 dated 09.02.2021, wherein adjudicating authority has confirmed the demand of Rs.2,70,80,797/-, interest of Rs.1,05,681/- & imposed penalty of Rs.2,70,80,797/-under Section 78 of the Finance Act, 1994. Aggrieved by the said impugned order, the Appellant has filed the present Appeal before this Tribunal.

3. Learned counsel submitted that the parent company of the Appellant, Cargo Service Centre (India) Private Limited³3. CSC had entered in to Concession Agreement with DIAL on November 19, 2009, for design, finance, development, construction, operation, maintenance and management of Cargo Terminal at Delhi Airport. In terms of the said