2017 (9) TMI 298

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....o secure repayment of amounts of credit facilities given to the said borrower, appellant has obtained building (factory), land, appurtenant to building, furniture, fixture, machinery, equipments, installations by way of mortgage and charge. The borrower has committed defaults in repayment of the credit facilities and accounts have been declared as non-performing by the appellant. After due process under SERFAESI Act, 2002 took over the actual and physical exclusive possession of the immovable property along with plant and machinery. In order to recover balance dues the appellant have decided to lease out seized property for the lease rent. Against the letting of the seized property, the appellant received the lease rent. The department has ....

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.... 2.1 He further submits that two properties were leased out. One property belong to M/s.Raje Vijay Singh Dafale Sahakari Sakhar Karkhana Ltd. and another property belonged to Tasgaon Palus Taluka SSK Ltd. and as far as the rent paid by Ganapati to the appellant in respect of property of Tasgaon Palus Taluka SSK Ltd. the service tax was in fact paid by the Ganapati in the name of Tasgaon Palus Taluka SSK Ltd.'s assesee code. This is evidenced from service tax challan enclosed at Page 42 to 49 of compilation of appeal No.ST/85192/13, the total of which comes to Rs. 46,62,492/- which is more than the service tax payable of Rs. 44,35,604/- on the rent received from that property on cum tax basis. He also submits that the question involved....

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....cannot be avoided. 4. We have carefully considered the submissions made by both sides. We find that the demand of service tax is on two counts. One is on rent received by the appellant and the other is on repair and maintenance expenditure incurred by the lessee for the repair and maintenance of lease premises. As regards the demand on service tax on repair and maintenance expenditure, we find that this amount is not towards lease rent. After leasing of the property it is up to the lessee to carry out the necessary repair and maintenance and the consideration on that count does not flow from lessee to lessor (appellant). Therefore, the said expenditure cannot be considered as extra consideration towards the lease rent. Lease rent is the ....