TaxTMI 
TaxTMI 
2018 (9) TMI 1722
X X X X Extracts X X X X
X X X X Extracts X X X X
....er obtained service tax registration for these services nor paid service tax. It was also noticed that the appellants had availed ineligible Cenvat credit and utilized the same for payment of service tax. Show-cause notice dated 12.01.2010 was issued to the appellants proposing to demand the service tax on various services along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand of service tax under various services along with interest and imposed penalties. Aggrieved, the appellants are now before the Tribunal. 2. On behalf of the appellants, the learned counsel Shri V.S. Manoj made oral and written submissions, which are summarised as under:- (i) The appellant is engaged in the business of building and developing multi-storied IT Parks, which are approved by Ministry of Information and Technology as well as offered various facilities for leasing to IT companies. They obtained registration under the category of "Renting of Immovable Property Service" and discharged service tax under this category. They availed Cenvat credit in respect of various input services used for construction of building, which was later....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the said amount being Capital Gains. There is no service element involved at all since the transaction is one of sale/transfer of right and interest of the appellants in the said property. Merely because the amount of Rs. 12.17 crores was paid by M/s. CCCL to the appellants, it is alleged by the department that the appellants have rendered "Real Estate Agents Service". The transaction, wherein, appellants have relinquished the right in the property, for which, consideration of Rs. 12.17 crores was received, the said transaction does not involve any element of service and, therefore, is outside the purview of "Real Estate Agents Service". He prayed to set aside the demand. (iii) The demand of an amount of Rs. 5,34,08,673/- is confirmed under "Business Auxiliary Service". The case of the department is that on scrutiny of annual report for the year 2006-07, inter alia, it had showed that the appellants have entered into a Joint Venture Agreement with M/s. Ascott (Mauritius) Co. Ltd., and transferred nearly 40% of the holdings to the Joint Venture partner. The learned counsel submitted that the transaction was only sale of Equity Shares to the extent of 40% held by the appellants, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1994 and submitted that "a person engaged in rendering any services in addition to sale, purchase, leasing or renting of real estate as well real estate consultant" would come within the definition of "Real Estate Agents". The appellants are engaged in real estate business only. An agreement for "Expression of Interest" [EOI] was entered by them with M/s. Rainbow Inc., on 04.07.2007 for purchase of property belonging to M/s. Rainbow Inc., for an agreed price of Rs. 25.57 crores. Appellant paid advance of Rs. 80,00,000/-. The date of conclusion of the transaction was fixed as 22.08.2007. The transaction was not concluded on such date for whatever reasons. After eight months from the date of agreement on the pretense that there was some issue of title of the land, it is contended by appellants that they did not want to purchase the land. Later an MOU was entered with M/s. CCCL for relinquishing the appellant's right over the property for an amount of Rs. 12.17 crores. The assessee has thus generated an income of Rs. 12.17 crores within a period of eight months as against the original advance of Rs. 80,00,000 given to M/s. Rainbow Inc. If there was any discrepancies with title and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he first issue is with regard to the demand in respect of Renting of Immovable Property Service". The main contention put forward by learned counsel for the appellants is that the demand includes the rent in respect of the period, which is prior to 01.06.2007. In para 7.1.0 of the impugned order, the Commissioner has considered this plea raised by the appellants. He has not accepted this contention raised by the appellants, stating that the documents furnished by the appellants do not establish that the demand includes rent, which is due as on 31.05.2007. If the amount includes rents pertaining to the period prior to 01.06.2007, it can be easily verified by looking into the payments received by the appellants after 01.06.2007. We, therefore, hold that the appellants have to be given one further chance to establish this plea raised by them. In the event, this issue with regard to the demand raised on "Renting of Immovable Property Service", is remanded to the adjudicating authority for re-consideration. (ii) The demand in respect of "Real Estate Agents Service" has been defended by the appellants saying that the transaction does not involve any activity which attracts "Real Estat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....demand on this count cannot sustain and requires to be set aside, which we hereby do. (iv) The demand of Rs. 18,64,194/- has been confirmed under "Management or Business Consultancy Services". The learned counsel for appellants has not put forward any argument in respect of this demand. We presume that the appellants are not contesting the same and, therefore, the said demand is not interfered by us. (v) The last issue is with regard to the Cenvat credit availed by the assessee. The appellants have availed Cenvat credit of service tax paid on the input services used in the construction of buildings. The said buildings were intended for providing Output Services of "Renting of Immovable Property Service". The department is of the view that the input services of construction cannot be considered as an input service, for the reason that construction results in making an immovable property. That, therefore, it cannot be said that the services are used for providing any output service. This issue has been settled in the case of M/s. Sai Samhmita Storages (P) Ltd. (supra). The Hon'ble High court in the said decision held that the credit of input services used for setting up a w....