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2023 (10) TMI 887 - AT - Service TaxLevy of service tax - service of renting of immovable Property or not - permanent transfer of the lease hold rights by the Appellant to the Business entities - to be termed as sub-lease to bring it under the ambit of levy of service tax or it can be termed as sale of leasehold rights which is not liable to service tax? - time limitation. HELD THAT:- The terms and conditions of the Deeds of Assignment clearly indicate that it is not a lease or sub-lease as alleged in the impugned order. In the instant cases, from the Deed of Assignment, it is observed that the Appellant does not have any reversionary right of the property after the after the permanent transfer of their leasehold rights to the three Business Entities. It is only the assignees who have the right to get the lease renewed in their favour after completing the formalities directly with the Govt. of West Bengal and the Appellant does not have any role in this regard. The permanent assignment of land cannot be called as 'lease' and hence it would not fall under the definition of taxable service as defined under Section 65(105)(zzzz) of the Finance Act,1994 - It is observed that once the Appellant executed the Deed of Assignment in favour of the three business entities, the 'Title' of the land which has been assigned to them has been transferred in the name of the said three parties. Subsequently, lands have also been mutated in the name of the respective parties. Therefore, the transaction must be treated as 'sale of leasehold rights' and service tax would not be applicable on the outright transfer of rights. Further, after the transfer, the 'rent' was payable by the three Business Entities directly to the DLLRO and not to the Appellant - the transaction undertaken by the Appellant cannot be termed as 'lease' or 'sub-lease' for the purpose of levy of service tax.\ It is observed that after the execution of Deeds of Assignment and permanent transfer of leasehold rights by the Appellant in favour of the Assignees, the Title of the land which has been assigned to the Appellant has also been transferred in the name of the said three parties and lands have already been mutated in the name of the respective parties. This is evident from the clarification issued by the DLLRO. Therefore, the transaction must be treated as 'sale of leasehold rights' and service tax would not be applicable on the outright transfer of rights for a period of 99 years. In the instant case, the Appellant has not received any 'rent' from the assignees and the rent is payable by the assignees to the state of West Bengal through DLLRO. Accordingly, the premium or salami paid to the Appellant for transfer of interest in the property, is not exigible to the service tax as held by the Tribunal in the case of Greater Noida Industrial Development authority vs Commissioner of Central Excise and Service Tax, Noida [2014 (9) TMI 306 - CESTAT NEW DELHI]. Time Limitation - HELD THAT:- The Appellant has furnished all information regarding the Deeds of assignment executed by them vide letter dated 26.08.2013. The Notice was issued on 11.06.2015, more than two years after all information was furbished by them to the investigating officers. Even otherwise, all information regarding the receipts from the said Business Entities are available in their profit and loss account. They were filing returns regularly and disclosed the rent income in which they have paid service tax. If the department has any doubt about the service tax paid by them, they could have clarified the same with the Appellant. Even after knowing the details, the officers took almost two years to issue the Notice. In view of the above, there is no suppression involved in this case and the entire demand issued in this case is barred by limitation. Accordingly, the demand is not sustainable on the ground of limitation also. The demands of duty along with interest and imposition of penalty in the impugned order is not sustainable - Appeal allowed.
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