2024 (11) TMI 1228

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....ase are that DGCEI received an intelligence through the sources that M/s Sagar Builders Pvt. Ltd. has constructed the Commercial Complex known as Radha-Krishan Textile Market and after completion of the construction of said complex, they have sold number of shops and given number of shops on rent. Officer searched the said premises and noticed that there are some shops left unsold, belonging to the Appellant and are given on rent. The DGCEI initiated the investigation against the appellant and revealed that Appellant has given 228 shops on rent to various tenants. This activity of renting shops fall under the taxable category of "Renting of Immovable Property" classified under the heading 65(105) (zzzz) of Finance Act 1994. It was contended....

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....l service tax demand. 2.1 He also argued that in the present matter revenue has calculated the service tax demand on hypothetical basis on the basis of assumption only on the basis of shop owner statements regarding the payment to agent in cash, however no cash receipts has been found by the department from the tenant. Therefore, it is clear that the department has demanded the excess service tax and demand of service tax required to reduce from 72,61,747/- to Rs. 17,82,992/- against the Appellant. 2.2 He also submits that Appellant was not liable for penalty on amount of service tax which has been already paid prior to issue of show cause notice. 3. On other hand Shri Rajesh Nathan , Learned Assistant Commissioner (Authorized Repr....

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....e. No cash receipts has been relied upon by the department, no financial flow back has been relied upon by the department for the collection of rent in cash, no rent agreement has been found by the department for the support of excess rent , no ledger entry in the books of accounts of the appellant found for so called excess collected rent. Moreover, none of the persons on whose statement reliance was placed by the department were cross-examined by the Ld. Commissioner in the present matter. Clearly, the Adjudicating Authority had failed to follow the requirement of Section 9D of the Central Excise Act 1944, which is applicable in Service Tax matters, regarding examination in chief of witness, therefore quantification of demand of service t....