Tribunal remands Renting Service demand, upholds Consultancy Service, sets aside Real Estate and Business Auxiliary Services demands. Cenvat credit disallowance overturned. Penalties cancelled.

The Tribunal remanded the demand under "Renting of Immovable Property Service" for reconsideration. The demand under "Management or Business Consultancy Services" was upheld. The demands under "Real Estate Agents Service" and "Business Auxiliary Service" were set aside. The disallowance of Cenvat credit on input services was also set aside. Penalties related to "Real Estate Agents Service," "Business Auxiliary Service," and wrongly availed Cenvat credit were consequently set aside. The appeal was partly allowed with consequential reliefs and partly remanded.

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Issues Involved:
1. Demand under "Renting of Immovable Property Service"
2. Demand under "Real Estate Agents Service"
3. Demand under "Business Auxiliary Service"
4. Demand under "Management or Business Consultancy Services"
5. Disallowance of Cenvat credit on input services

Detailed Analysis:

1. Demand under "Renting of Immovable Property Service":
The appellants argued that the demand included rent for periods before 01.06.2007, which should not be taxable as the service became taxable only from 01.06.2007. The Commissioner did not accept this contention, stating that the documents provided did not establish that the demand included pre-01.06.2007 rent. The Tribunal decided to remand this issue to the adjudicating authority for reconsideration, allowing the appellants another chance to produce necessary details.

2. Demand under "Real Estate Agents Service":
The appellants contended that the transaction in question was a relinquishment of property rights and not a service under "Real Estate Agents Service." They had entered into an agreement to purchase property and later relinquished their rights in favor of another company, receiving a substantial amount. The Tribunal found that this transaction did not involve any service element and was merely a transfer of property rights. Consequently, the demand under "Real Estate Agents Service" was set aside.

3. Demand under "Business Auxiliary Service":
The department alleged that the sale of shares by the appellants constituted a service under "Business Auxiliary Service." The appellants argued that this was a simple sale of shares, on which they had paid capital gains tax. The Tribunal agreed with the appellants, stating that the sale of shares did not amount to promoting the business of the purchaser and thus did not fall under "Business Auxiliary Service." The demand on this count was set aside.

4. Demand under "Management or Business Consultancy Services":
The appellants did not contest the demand of Rs. 18,64,194 under "Management or Business Consultancy Services." Therefore, the Tribunal upheld this demand without further interference.

5. Disallowance of Cenvat credit on input services:
The appellants had availed Cenvat credit on input services used in constructing buildings intended for "Renting of Immovable Property Service." The department disallowed this credit, arguing that construction services do not qualify as input services for providing output services. The Tribunal referred to the High Court's decision in the case of M/s. Sai Samhmita Storages (P) Ltd., which allowed such credits. Following this precedent, the Tribunal set aside the disallowance of Cenvat credit, holding that the appellants were eligible for the credit.

Conclusion:
- The demand under "Renting of Immovable Property Service" was remanded for reconsideration.
- The demand under "Management or Business Consultancy Services" was upheld.
- The demands under "Real Estate Agents Service" and "Business Auxiliary Service" were set aside.
- The disallowance of Cenvat credit on input services was set aside.
- Penalties related to "Real Estate Agents Service," "Business Auxiliary Service," and wrongly availed Cenvat credit were consequently set aside.
- The appeal was partly allowed with consequential reliefs and partly remanded.

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