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2019 (8) TMI 913 - AT - Service TaxBusiness Auxiliary services - services to M/s Barmer Lignite Mining Company Limited - period 2008, 2009 to 2012-13 - acquisition of land made by the appellant for setting up of the thermal power plant - denial of permission of transfer of land - lease of mines - Point of taxation rules - deployment of officers in the JV company - time limitation. Whether the acquisition of land made by the appellant for setting up of the thermal power plant by the JV company as per the agreement entered with RWPL is to be considered as service after the denial of permission of transfer of land, acquired by the JV company? - HELD THAT:- The provisions of Mines and Minerals Act, clearly states that the element of surface right is not the main activity in the mining operation, but it is only incidental to that. In such a situation, the incidental activity cannot be treated as a main activity, which is mining and benefit arising out of law, to be an independent service under the category of renting of immovable property service. Even if it is presumed that surface right is activity which could be construed as renting of immovable property, the entire sale consideration could not be treated towards the value of service provided by the appellant. The Revenue has not taken pain to segregate as to what is the value of the service component involved in the transaction. The treatment of entire amount that has been spent towards the acquisition of land, by no stretch of imagination, can be treated as value towards the alleged service - There is no element of service involved in the transaction, undertaken by the appellant while acquiring the land and transferring the same to the JV company, for setting up of the power plant. Whether the 51% equity stake which has been granted to the appellant by the Implementation Agreement, in the JV company, could be treated as ‘Business Auxiliary Service’ - HELD THAT:- The Commissioner has not given any category under this it is to be treated as service. We find that the activity of grant of 51% share in JV is not covered in any of the sub heading under the ‘Business Auxiliary Service’, as defined in Section 65(105) of the Finance Act. It is also not clear from the impugned order or from the submission made by the learned Authorised Representative as to whether this grant of equity to the appellant will be covered under definition of the BAS, under the Act. Even by assuming that the grant of 51% of equity is considered as consideration, for rending of service, the same was granted in year, 2008-09, while the notice has been issued on 18.03.2015, this is even beyond the limit of five years, therefore, the show cause notice could not have been issued on this count. The demand is, therefore, not sustainable. Whether deployment of officers in the JV company, would amount to rendition of service under the category of ‘Business Auxiliary Service’ - HELD THAT:- Regarding the expenses recovered by the appellant on actual basis from BLMCL, the JV company, towards deputation of their employee and related expenses, cannot be categorised under the BAS. Even otherwise the deputation of employee in the JV company cannot be treated as BAS - the deputation of the employee to the JV company cannot be held to be service. Thus no service tax is to be charged. Time Limitation - HELD THAT:- The entire activity of acquiring of the land by the appellant, on behalf of the JV company, was known to the Department before issue of the show cause notice. Also the entire issue of non transfer of land by the appellant to the JV company, was taken by the Government of India and by the State of Rajasthan, subsequent to the acquisition of land, can be considered only as a change of opinion in the subsequent periods - there is no case of suppression of facts, so as to invoke larger period of limitation, for raising the demand, is not available to the Department and thus the demand is not sustainable - demand is time barred. Appeal allowed.
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