TaxTMI 
TaxTMI 
2017 (1) TMI 609
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....he development of immovable property. The dispute in appeal No. ST/1685/2010, is with reference to certain amounts charged by the appellants which are described as 'administrative charges', 'restoration charges' and 'transfer charges' from their clients. In appeal No. ST/1107/2011 the dispute is with reference to 'administration charges' which are in the nature of 'transfer charges' in the first appeal. Revenue has taken the view that these charges have been recovered in connection with the sale of real estate and hence, are liable to service tax under the category of Real Estate Agent Services defined under Section 65 (88) of the Finance Act, 1994, which has been introduced w.e.f. 16/10/1998. After issue of show cause notice, the service t....
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....ned Counsel was that till the date of completion of construction and full payment of the agreed sum and execution of sale deed in favour of the buyer of the property, the ownership of the property continues to remain with the developer. He submits that any amounts recovered till this date would be in the nature of self-service and consequently would not attract service tax. He relied upon the following case laws :- (a) CST vs. Sujal Developers reported in 2013 (31) S.T.R. 523 (Guj.) ; (b) Monsanto Manufacturer Pvt. Ltd. vs. CCE & ST reported in 2014 - TIOL - 550 - HC - ALL - ST. 4. Learned DR on the other hand supports the order passed by the Adjudicating Authority. He submits that all these charges recovered are towards the sale of Real....
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.... the Transfer of Property Act, 1882 as follows :- 'Sale is defined :- 'sale' is a transfer of ownership in interest for a price paid or promised or part paid or part promises". 6. The administration charge has been recovered by the appellant from all original allottes of flats to cover expenses in connection with registration etc. It is fairly obvious that such charges are not covered within the definition of Real Estate Agent, in as much as it has been collected by the appellant directly from the allottes. In such a transaction there are only two parties - the buyer and seller (appellant) of the flat. Since no service has been rendered, the demand for service tax is not sustainable. 7. Next we turn to the 'restoration charges', which ha....
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.... completed. During the process of transfer of the allotment to the new buyer, this right vested in the original allottee gets transferred to the new allottee. The consideration payable for such transfer, will be the amount of installments already paid so far by the original allottee which needs to be paid up by the new allottee to the original allottee. The appellant, has recovered transfer charges which becomes the consideration for facilitating such sale. A person who is engaged in rendering any service in relation to sale of real estate is liable to pay service tax under the Real Estate Agent Services. As discussed above, the transfer charges would be liable for payment of service tax under the above category. 9. The learned DR has rel....
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.... has strongly contended that it was under bona fide belief that these charges being administrative in nature did not constitute part of the "Real Estate Agent" service. It is seen that the primary adjudicating authority in the impugned order has clearly noted that the appellant undoubtedly accounted for all the transactions in the statutory records. But the primary adjudicating authority held that the appellant was guilty of wilful misstatement/suppression of facts with intention to evade Service Tax as it never approached the Department to ascertain the details of their liability to pay Service Tax and the evasion would have gone undetected but for the investigation by the Department. In this regard it is pertinent to mention that in case ....