TMI Blog2023 (10) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... PVT. LTD., MAGRPATTA TOWNSHIP DEVELOPERS CONSTRUCTION CO. LTD., JAIN CONSTRUCTION, SAI CONSTRUCTION PVT. LTD., INDIA LAND INFRASTRUCTURE DEVELOPMENT PVT. LTD., RVS HOSPITALITY DEVELOPMENT PVT. LTD., VANSUM INDUSTRIES AND THE MANJRI STUD FARM PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE-II [ 2014 (9) TMI 461 - CESTAT MUMBAI ] reveals that since the consideration for leasing of the property is rent, so what can be levied to service tax is only rent and notional interest on the security deposit cannot be subjected to levy of service tax. From decision of the Tribunal, it has to be held that service tax could not have been levied on the notional interest calculated by the department on the interest fee security deposit colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a detailed reply to all the show cause notices contending that it was not liable to pay service tax on the notional interest calculated by the Department, as that would not be a consideration for the provision of a service. The reply filed by the appellants was not accepted by the department in some cases and the demands raised in the show cause notices were confirmed/dropped. 5. Feeling aggrieved, the appellants filed appeals before the Commissioner (Appeals) and the department also filed appeals. The Commissioner (Appeals) has confirmed the demand in all the appeals. 6. Ms. Priynaka Goel, learned counsel appearing for the appellant and Shri M.B. Maheshwari, learned Chartered Accountant have contended that the advances received by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money, with the addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged. (3) The gross amount charged for the taxable service shall include any amount received towards the taxable servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability. The security deposit is taken for a different purpose altogether. It is to provide for a security in case of default in rent by the lessee or default in payment of utility charges or for damages, if any, caused to the leased property. Thus, the security deposit serves a different purpose altogether and it is not a consideration for leasing of the property. The consideration of the leasing of the property is the rent and, therefore, what can be levied to Service Tax is only the rent charged and no notional interest on the security deposit taken can be levied to tax. There is no provision in Service Tax law for deeming notional interest on security deposit taken as a consideration for leasing of the immovable property. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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