MERCURY ESTATE Vs. COMMISSIONER OF SERVICE TAX, DELHI
LAWS(CE)-2015-3-94
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on March 31,2015

Mercury Estate Appellant
VERSUS
Commissioner Of Service Tax, Delhi Respondents

JUDGEMENT

R.K.SINGH, MEMBER (T) - (1.)STAY application along with appeal has been filed against Order -in -Original No. 180/GB/2013, dated 29 -11 -2013 in terms of which a Service Tax demand of Rs. 98,22,427/ - along with interest and penalties had been confirmed for the period 1 -10 -2004 to 31 -3 -2008. The appellants had entered into an agreement with M/s. Sahara India Commercial Corporation Ltd. for acquisition, development and management of its real estate project at Sahara City Homes, at Jodhpur and Allahabad for which they received payment from M/s. Sahara India but did not pay Service Tax as per MOU. The service provided included "levelling of soil including filling of gorges/nallah, etc., by hiring tractor and trolley including driver wages, fuel, etc., removing shrubs, grass and rubbish from the area complete in all respects." The impugned demand was confirmed under the category of "Real Estate Agent" service. The appellants have contended that while they would like to submit additional evidence, the cost of land could not be part of the value of real estate agent service while the impugned demand has been confirmed on value which included the value of the land. They also stated that their service is not covered under the category of real estate agent service as land acquired was agricultural land on which real estate could not be developed as per law and the value of the goods involved is also excludible in terms of Notification No. 12/2003 -S.T. They also pleaded that there was no willful misstatement/suppression and so demand is time -barred.
(2.)We find that the adjudicating authority has considered the contention that value of the land is not includible in the assessable value for charging Service Tax but noted that the appellants failed to give the cost of land. The adjudicating authority further noted that the average cost of land mentioned by the appellants was inclusive of the profit of the appellants which was includible in the assessable value. Thus when the appellants failed to provide the evidence of the value of land, the adjudicating authority felt constrained not to deduct the value thereof. Similarly, it was for the appellants to provide evidence required for the benefit of Notification No. 12/2003. As regards the contention of the appellants that they were not providing real estate agent service, we find that as per the definition of real estate agent given in Section 65(88) of the Finance Act, 1994 [read with Section 65(89)] of the Finance Act, 1994 providing advice, consultancy or technical assistance in relation to evaluation conception, design, development, construction/acquisition of real estate is also clearly covered under the scope of Real Estate Agent service. As regards the appellants' contention that development of agricultural land is outside the purview of Service Tax, it is to be noted that service provided in relation to agriculture is excluded from the purview of Section 65(97a) ibid, but in the present case land was (being) developed for real estate and therefore, it was a service provided in relation to real estate and not in relation to agriculture (even if for the sake of argument, the land is held to be agricultural land). As regards the contention that there was no willful misstatement or suppression of fact, this requires a detailed analysis which can be taken up only at the time of final hearing. Similarly the request for submitting additional evidence/documents would be considered at the time of final hearing of the appeal. However, having regard to all these factors and in view of the fact that issues of classification and valuation also need to be analysed at the time of final hearing, we are of the view that pre -deposit of 25% of the impugned Service Tax liability with proportionate interest would meet the requirement of Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Accordingly, we order pre -deposit of 25% adjudicated Service Tax liability with proportionate interest within six weeks. Compliance is to be reported on 21 -5 -2015. Subject to such compliance, the recovery of the remaining adjudicated liability is stayed during pendency of the appeal. In case of default, the appeal shall stand dismissed for failure of pre -deposit.
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