Dispute over Land Cost in Service Tax Calculation Upheld: Appellants Required Pre-Deposit

The case involved disputes over the inclusion of land cost in the assessable value for service tax calculation and the classification of services as real estate agent services. The Tribunal upheld the inclusion of land cost in the assessable value, considering it part of the real estate agent service. The appellants were required to make a pre-deposit of 25% of the service tax liability to proceed with the appeal process, failing which the appeal would be dismissed. The decision focused on procedural requirements and did not extensively address the exclusion of goods value under Notification No. 12/2003-ST.

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Issues:
1. Inclusion of the cost of land in the value of real estate agent service for service tax calculation.
2. Classification of the service provided by the appellants under the category of real estate agent service.
3. Allegations of wilful mis-statement/suppression of facts.
4. Exclusion of the value of goods involved during the service in accordance with Notification No. 12/2003-ST.

Analysis:
1. The primary issue in this case revolves around the inclusion of the cost of land in the assessable value for charging service tax. The appellants argued that the cost of land should not be part of the value of real estate agent service, while the demand was confirmed based on a value that included the land cost. The adjudicating authority noted the appellants' failure to provide the cost of land separately, leading to the conclusion that the average cost mentioned by the appellants already included their profit, making it includible in the assessable value.

2. Regarding the classification of the service provided by the appellants, the Tribunal referred to the definition of real estate agent service under the Finance Act. The definition includes any advice, consultancy, or technical assistance related to the design, development, construction, or acquisition of real estate. Despite the land being agricultural, the service provided by the appellants was considered to be related to real estate, falling under the scope of real estate agent service.

3. The appellants also contested the allegations of wilful mis-statement or suppression of facts. The Tribunal acknowledged that a detailed discussion on this matter would be necessary during the final hearing. However, based on the facts and circumstances presented, the Tribunal ordered a pre-deposit of 25% of the service tax liability along with proportionate interest as per the legal requirements. Failure to comply with this pre-deposit would result in the dismissal of the appeal.

4. Lastly, the appellants argued for the exclusion of the value of goods involved during the service under Notification No. 12/2003-ST. The Tribunal did not delve deeply into this aspect in the provided summary, focusing more on the primary issues of land cost inclusion and service classification. The decision primarily emphasized the necessity of pre-deposit to meet statutory requirements and stay the recovery of the remaining liability pending the appeal process.

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