TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1271
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....movable property services. The appellant has been regular in filing its service tax returns with the appropriate service tax authority. 2.1. An audit of the books of accounts of the Appellant was conducted by the service tax audit team of the department. The audit team made certain observations vide Audit Memo dated 08.06.2016 regarding non-payment / short-payment of service tax in respect of certain services rendered by the appellant. The appellant had replied to the said audit memo vide replies dated 09.07.2016 and 09.08.2016. 2.2. The audit team did not accept the reply given by the appellant. Consequently, a Show Cause cum Demand Notice was issued to the appellant vide C. No. III (03)563/SCN-BRK/AR/Tech/Audit/2016/6147 dated 07.10.2016, demanding service tax of Rs.1,81,69,980/- along with interest and penalty. 2.3. The said Notice was adjudicated vide Order-inOriginal No. 03/Pr.Commr./2025 dated 27.06.2025, wherein the Ld. Principal Commissioner has confirmed the demand of service tax made in the notice along with interest. He also imposed equal amount of tax as penalty. 2.4. Aggrieved against the confirmation of service tax along with interest and penalty, the appe....
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....se agreement they had erected a mall i.e., "Bokaro Mall", comprising of Shopping Mall, Multiplex, Food Courts, Hotels, Restaurants, Retail Showrooms, Offices and other commercial spaces and the basement for parking on the said premise. The Appellant had also made various electrical installations, first-aid and firefighting installations in the mall for ease in functioning of the mall. The Appellant also follows and carries out the directions of SAIL issued with regard to sanitation and proper maintenance of the demised land along with erected mall therein to keep the mall in a proper condition. 3.4. The Appellant states that the issue of service tax liability on the lease premium charged by them from the prospective buyers under construction services is no longer res integra and the CESTAT, Kolkata in the case of SAFARI RETREATS PVT. LTD. Vs PRINCIPAL COMMISSIONER OF G.S.T. AND C.EX. BHUBANESWAR (2025) 26 Centax 53 (Tri.-Cal), has held that the activities carried by the Appellant are squarely covered under the definition and scope of construction services and not under 'Renting of Immovable Property Services'. 3.5. The Appellant states that Vide Notification No.26/2012-ST dat....
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....e appellant submits that the said shortfall in service tax liability amounting to Rs.8,80,183/- under the category of "Renting of Immovable Property Service" was paid by them in the return period April'16 to September'16. The Appellant submits that they had produced the reconciliation statement before the Ld. Adjudicating authority to prove its bonafide, which has been summarily rejected by the Ld. Adjudicating authority on the ground that no evidence has been produced by the Appellant. In support of this claim, the appellant also produced a Chartered Accountant Certificate reconciling the figures. Thus, the appellant submits that there is no short payment of service tax for 2014-15 by the Appellant. Accordingly, the appellant submits that the demand confirmed in the impugned order on this count is not sustainable. 5. As regards demand of service tax of Rs. 46,06,353/- the Appellant states that the Ld. Adjudicating authority has confirmed the demand of service tax of Rs. 46,06,353/- on extra development charges for the period 2014-15. The Appellant states that on one hand the Ld. Adjudicating authority has held that the said charges are in the nature of construction services and....
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....turns of the director are not sufficient to establish employer-employee relationships, which is legally not correct. Accordingly, the appellant submits that no service tax is payable by them on RCM basis on the Director's remuneration. 6.2. Regarding the demand of service tax on GTA services on RCM basis, the Appellant states that they had availed transportation services from local truck owners for carrying materials required for construction from local vendors/sellers. The Appellant states that the demand of Rs. 35,569/- is based on presumptions that the Appellant has availed services of GTA. In this regard, the Appellant states that they had provided ledger copies and other voucher copies to show that such expenses were of local transport charges for supplies and no GTA issuing consignment note was involved in such work. The Appellant states that there is no consignment note brought on record by the department to prove involvement of GTA and thus no service tax under RCM can be charged. 6.3. As regards demand of service tax on security services under RCM basis, the Appellant states that the Ld. Adjudicating authority has confirmed demand of service tax on security services ....
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.... longer res integra, as this Tribunal, in the case of SAFARI RETREATS PVT. LTD. Vs PRINCIPAL COMMISSIONER OF G.S.T. AND C.EX. BHUBANESWAR (2025) 26 Centax 53 (Tri.-Cal), has taken the view that the premium paid by the prospective buyers are not liable to service tax under the category go 'Renting of Immovable Property Services'. The relevant part of the said decision is reproduced below:- "10. Section 54 of the Transfer of Property of Act,1882, reads as under : " 'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised". It is an admitted fact on record that the appellant has transferred the leasehold rights of the immovable property for one time consideration termed as Sub-Lease Premium". 10.1. The State Govt of Odisha requires stamp duty to be paid on such transactions, treating the same as deemed sale. Accordingly, the appellants have paid the requisite stamp duty on the total consideration received from the buyers. 10.2. It is also observed that the appellant has received the lumpsum amount as consideration from the buyers on a one-time basis. There is no evidence that the appe....
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....of Property Act, a lease of immovable property is a transfer of a right to enjoy the property made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent. The section, therefore, brings out the distinction between a price paid for a transfer of a right to enjoy the property and the rent to be paid periodically to the lessor. When the interest of the lessor is parted with for a price, the price paid is premium or salami. But the periodical payments made for the continuous enjoyment of the benefits under the lease are in the nature of rent. The former is a capital income and the latter a revenue receipt. There may be circumstances where the parties may camouflage the real nature of the transaction by using clever phraseology. In some cases, the so-called ....
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....ing, was before the Tribunal in the case of Greater Noida Industrial Development Authority v. Commissioner of Central Excise and Service Tax, Noida [(2015 (38) S.T.R. 1062 (Tri.-Del) ]. The relevant extracts are reproduced below:- "10. Whether the Service Tax is chargeable only on the lease rent or also on one time premium amount charged in respect of long term leases? 10.1 A lease is a transaction, which has to be supported by consideration. The consideration may be either premium or rent or both. The consideration which is paid periodically is called rent. As regards premium, the Apex Court in the case of Commissioner of Income Tax, Assam and Manipur v. Panbari Tea Co. Ltd. reported in (1965) 3 SCR 811 has made a distinction between premium and rent observing that when the interest of the lessor is parted with for a price, the price paid is premium or salami, but the periodical payments for continuous enjoyment are in the nature of rent, the former is a Capital Income and the latter is the revenue receipt. Thus, the premium is the price paid for obtaining the lease of an immovable property. While rent, on the other hand, is the payment made for use and occupatio....
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....he appellant sub-leased the properties to various parties. In respect of the land to be mutated by the sub-lessee in their name, the sub-lessee is deemed to be the lessee of the said plot and has to apply to KMC for renewal of lease after expiry of the 99 years lease period. After mutation, the full rights and title goes in favour of the sublessee, subject to renewal of the original deed after its expiry. Therefore, the appellant treated the said transaction as 'sale of leasehold rights' and not paid service tax on the outright transfer of lease hold rights. However, the department considered the transaction of long term lease undertaken by the appellant as a taxable service liable for service tax under the category of 'Renting of immovable property service'. The department considered the one time Premium/ Salami received by the appellant from the sublessee as consideration towards the taxable service namely, 'Renting of Immovable Property Service'. .............. 6.3. We observe that the Appellant does not have any reversionary right of the property after the permanent transfer of their leasehold rights to the respective sub-lessee. It is ....
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....old that the appellant has not rendered any service under the category of 'Renting of Immovable property'. Therefore, the confirmed demand of Rs.11,58,32,907/-, is legally not sustainable and we set aside the same and allow the Appeal filed by the appellant on merits to this extent." 10.3. Thus, by relying on the decisions cited supra, we hold that the demand of service tax of Rs. 1,48,99,067/- confirmed on lease premium amount, under the category of 'Renting of Immovable Property Services' is not sustainable and accordingly, we set aside the same. 11. Regarding the demand of service tax of Rs. 880,183/-, we observe that the Ld. Adjudicating authority has confirmed the demand of service tax of Rs. 880,183/- on account of discrepancies between ST 3 and books of accounts under renting of immovable property services for the FY 2014-15. The appellant submitted that they have already paid the shortfall in service tax liability amounting to Rs.8,80,183/- under the category of "Renting of Immovable Property Service" in the return period April'16 to September'16. In support of this claim the appellant submitted a reconciliation statement and a Chartered Accountant Certificate....
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....ng service tax liability on the Director's remuneration, we observe that the said remuneration has been considered as salary for income tax purposes and the Director has paid income tax on the same. In this regard, we observe that Board has categorically clarified vide CIRCULAR NO. 140/10/2020 - GST [CBEC-20/10/05/2020 - GST], DATED 10-6-2020, if the income is considered as salary for income tax purposes, then service tax cannot be demanded on the same. Accordingly, we hold that no service tax is payable by the appellant on RCM basis on the Director's remuneration. 13.2. Regarding the demand of service tax on GTA services on RCM basis, we observe that the appellant had availed transportation services from local truck owners for carrying materials required for construction from local vendors/sellers. In this regard, we observe that the appellant had provided ledger copies and other voucher copies to show that such expenses were of local transport charges for supplies and no GTA issuing consignment note was involved in such work. We observe that there is no consignment note brought on record by the department to prove rendering of GTA service. Accordingly, we hold that no service ....
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.... tax is not applicable Maintenance Corpus Deposit 24,66,944 Maintenance Deposit 12,20,225 D. Less : Cheques returned to sub-lessess 6,85,760 E. Income Recognised with retrospective effect in the ledger because of above charges (A-B-C-D) 1,07,09,123 Total Extra Development Charges as per P & L A/c (EDC Income) Gross Value Electrical Installation Charges 9,50,707 Electrical Meter Charges 9,22,334 Generator Charges 44,39,913 Legal Expenses 7,09,000 Maintenance Corpus Deposit 24,66,944 Maintenance Deposit 12,20,225 Income recognised in F.Y. 14-15 on which service tax discharged in F.Y. 15-16 in receipt basis. 44,55,097 II. Total EDC Income as per Books (Recognised) 1,51,64,220 Less: EDC Income on which Service Tax discharged in F.Y. 14-15 under head "Repairs and maintenance" of ST-3. 71,01,695 Less: EDC Income on which Service Tax discharged in F.Y. 15-16 under head "Repairs and maintenance" of ST-3. 43,75,356 Less: Maintenance Corpus Deposits on which Service tax is not applicable 24,66,944 Less: Maintenance Deposit on which Service tax is not applicable 12,20,225 Short Discharge of service tax Document 2 PANKAJ BAID & ASSOCIAT....