Tribunal rules against appellant in service tax case for acting as middleman in land transactions

The tribunal ruled against the appellant in a case involving liability to pay service tax under 'Real Estate Agent Service.' It found the appellant acted as a middleman in land transactions, contrary to the appellant's arguments. The tribunal upheld the service tax demand and interest but set aside penalties under Sections 77 & 78 due to the appellant's genuine belief that the transactions were not covered under 'Real Estate Agent Service.' The appeal was partly allowed, modifying the order accordingly.

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Issues Involved:
1. Liability to pay service tax under 'Real Estate Agent Service'
2. Invocability of the extended period
3. Reasonable cause for non-imposition of penalties under Section 80 of the Finance Act 1994

Summary:
The appellant, engaged in 'Renting of Immovable Property Services,' faced scrutiny for not registering for 'Real Estate Services' despite receiving payments, leading to a demand for service tax, interest, and penalties. The appellant argued that the received amounts were profits from land transactions, not Real Estate Agent services, supported by General Power of Attorney and declarations from landowners. However, the department contended the appellant acted as an intermediary and suppressed facts to evade tax.

On the first issue, the tribunal found that the appellant indeed acted as a middleman/agent in land transactions, receiving consideration for services rendered, contrary to the appellant's claims. The tribunal agreed with the original authority and Commissioner (Appeals) on the merits, ruling against the appellant and in favor of the Revenue.

Regarding the invocability of the extended period, the tribunal noted that the appellant's failure to register under 'Real Estate Agent Service' and pay service tax would have gone unnoticed without audit scrutiny. While the demand was upheld, penalties under Sections 77 & 78 were set aside based on the appellant's genuine belief that the transactions were not subject to 'Real Estate Agent Service.'

In conclusion, the tribunal modified the order by setting aside penalties under Sections 77 & 78 but upheld the service tax demand and interest. The appeal was partly allowed in this regard.

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