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2018 (4) TMI 1499 - AT - Service TaxValuation - Renting of immovable property service - inclusion of amount towards Repair and Maintenance services - whether the value of repair and maintenance, which was incurred by RBPSSK, on the sugar factory needs to be included on the value, as received for renting of immovable proper or otherwise; and whether consequential interest and penalties on demand on such value needs to be upheld? Held that: - the adjudicating authority in the impugned order has specifically recorded that the lessee RBPSSK had undertaken the repair and maintenance of the plant and machinery of the sugar factory before it was put to use for manufacturing purpose - the said value/ consideration is not towards the lease rent, which is collected by the appellant from various lessees towards the loan taken by the principal sugar factory YSSK. The issue of inclusion of the consideration/ expenditure made on repairs and maintenance cannot be included for demand of tax under Renting of property services is now settled by the Bench in the case of Maharashtra State Co-op Bank [2017 (9) TMI 298 - CESTAT MUMBAI], where it was held that the said expenditure cannot be considered as extra consideration towards the lease rent. Lease rent is the only amount which is received by the appellant on account of lease of the premises to the lessee. Therefore, the demand on expenditure towards repair and maintenance is not sustainable. Liability of interest - Held that: - the interest liability arises on the appellant in respect of amount received as lease rent and that needs to be discharged if not done so. Penalty - Held that: - the amounts spent towards repair and maintenance cannot be included in the value for calculating tax liability, penalty imposed by the adjudicating authority on the appellant herein needs to be set aside. Appeal allowed in part.
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