TaxTMI 
TaxTMI 
2026 (3) TMI 27
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.... on the basis of the findings of the audit officers, a Show Cause Notice dated 15.05.2015 was issued to the appellant, demanding Service Tax of Rs.2,43,01,516/- (inclusive of Cess) for the period from July 2010 to March 2014. The said Notice also proposed to impose penalty on the appellant under Section 78 of the Finance Act, 1994. 4. Upon adjudication, the ld. adjudicating authority, vide the impugned order, has dropped the demand to the extent of Rs.1,28,18,761/- and confirmed the balance demand amounting to Rs.1,14,82,755/-, along with applicable interest thereon. An amount equivalent to the above Service Tax demanded was imposed as penalty under Section 78 of the Finance Act, 1994. 4.1. Aggrieved by the confirmation of the above demands, the appellant has filed this appeal. 5. The appellant has provided a break-up of the demands confirmed under the various categories amounting to Rs.1,14,82,755/- in the impugned order, which is given below: - (i) Car Parking: Rs.15.11 lac (ii) Advance Booking (Mall): Rs.9.82 lac (iii) Advance Booking (Office/Shop): Rs.7.26 lac (iv) Nomination Charges: Rs.2.73 lac (v) Advance (Others): Rs.79.....
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.... provided at paragraph 5.7 of the impugned Order-in-Original dated 28.11.2016, wherein the advances received by the appellant during the Financial years 2010-11, 2011-12, 201213 and 2013-14 have been summarized, in the following manner: - 6.2. In respect of their tax liability on the amounts received in relation to the Nomination Agreements, the appellant's submission is that the ld. adjudicating authority, while passing the impugned order, has not taken into consideration the fact that the above said amounts were received by them prior to 01.07.2010; that the entire amount received from the transferee has been taken as the sale proceeds for construction service and Service Tax has been demanded by considering the entire consideration has been received by the assessee after 01.07.2010. The appellant submits that there is no dispute that the advances received prior to 01.07.2010 are not liable to service tax. Based on these submissions, the Ld. Counsel appearing on their behalf contends that the demand of Service Tax of Rs.79,91,642/- confirmed in the impugned order, along with interest and penalties, is not sustainable in law. 6.3. The Ld. Counsel for the appellant has also p....
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....4/3/2010-TRU dated 01.07.2010, wherein it has been clarified that payments made prior to the effective date do not fall within the purview of Service Tax. The relevant extract of the above reads as follows: - "2. Services provided or payments made prior to the effective date: 2.1 Vide Finance Act, 2010, eight new services were added to the list of taxable services while the scopes of nine existing services were modified. As these changes become effective from 1-7-2010, activities that are covered under taxable service categories due to above additions or modifications, would start attract service tax from this date. It is however, possible that a part or full payment of the consideration for such services provided after the appointed date has already been received prior to that date, i.e. advance payments. The examples are: where a domestic air journey performed after 1st July 2010, but the ticket is issued on payment prior to such date or where a construction activity falls within the taxable service only after the said date but the payment (full or in part) has been made before this date. While legally tax is payable on such amounts received, it has been decided....
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.... a clear picture of the status of the consideration received by the said assessee from the Transferee i.e. M/s Ever Youts Promoters Pvt Ltd. What it presents that the ultimate buyer of the property entered in agreement with the said assessee after 1.7.2010 and therefore whatever adjustment of payments are made, the accountability of those considerations would fall on the final possessor of the property i.e. the Transferee. Therefore, when the consideration includes the reimbursable amounts as stated in previous paragraph, the entire consideration is also to be considered as received by the said assessee after 1.7.2010. Mere transfer of the amount by the Transferor in the name of Transferee in the present context by no stretch of imagination can be considered as money paid by the Transferee at an earlier date i.e. prior to the agreement date 18.11.2010. Moreover, the transferee has also been charged with "nomination cost". Hence the contention of the said assessee cannot be entertained under the given perspective." 13.1. On perusal of the findings supra, we find that the Ld. adjudicating authority has given his findings w.r.t. the Nomination Agreement dated 18.11.2010. We have go....
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....e do not agree with the method adopted by the Department for arriving at the Service Tax liability of the appellant on the entire value declared in the Nomination Agreement. 13.3. The above findings are applicable in principle to all the other Nomination Agreements entered into by the appellant during the period under consideration in this case. 13.4. Thus, we hold that the method adopted by the Department for demanding Service Tax on the above amounts received by the appellant is legally unsustainable. Accordingly, we hold that the demand of Service Tax to the extent of Rs.79,91,642/- is not sustainable. 14. As regards the remaining amount of Service Tax confirmed vide the impugned order, other than the amount contested by the appellant as above, we find that the appellant has submitted that they have already discharged their Service Tax liability to that extent, amounting to Rs.36,24,622/-. In fact, it can be seen that the above payment/s made by the assessee have been admitted and acknowledged by the ld. adjudicating authority at paragraph 5.13 of the impugned order, but the same have not been taken into consideration and appropriated in the impugned order, on the groun....