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TMI Blog2014 (9) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... x demand confirmed are given in the table below: S.No Appeal No. Appellant Order-in-Original No. & Date Period involved Service Tax Demand confirmed (Rs.) 1 ST/86521/2013 Murli Realtors Pvt. Ltd. PUN-EXCUS-003-COM-043-13-14 dated 14/02/2014 April 2008 to Mar 2013 63,34,710/- 2 ST/85382/2013 Magarpatta Township Developers & Construction Co. Ltd. 20/P-III/ST/COMMR/2012-13 dated 14/12/2012 June 2007 to January 2011 3,26,12,102/- 3 ST/86957/2014 PUN-EXCUS-003-COM-051-13-14 dated 29/03/2014 01/02/2011 to 30/09/2013 2,70,84,079/- 4 ST/89511/2013 Jain Construction PUN-EXCUS-003-COM-009-13-14 dated 28/08/2013 01/06/2007 to 31/03/2012 1,00,61,050/- 5 ST/89898/2013 Sai Construction Pvt. Ltd. PUN-EXCUS-003-COM-015-13-14 dated 30/09/2013 01/06/2007 to 31/03/2012 1,01,41,529/- 6 ST/85580/2014 India Land Infrastructure Development Pvt. Ltd. PUN-EXCUS-003-COM-022-13-14 dated 18/11/2013; 01/06/2007 to 31/03/2012 99,67,789/- 7 ST/86118/2014 RVS Hospitality & Development Pvt. Ltd. PUN-EXCUS-003-COM-040-13-14 dated 22/01/2014; 04/01/2008 to 31/03/2013 79,60,263/- 8 ST/86243/2014 Vansum Industries PUN-EXCUS-003-COM-041-13-14 dated 28/01/2014; June 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax is a transaction based tax and the value liable to service tax would be the consideration received by the service provider under the contract. Section 67 of the Finance Act, 1994 provides for the measure of levy. The said section reads as follows: "(1) Subject to the provisions of this Chapter, where service tax is chargeable on any taxable service with reference to its value, then such value shall - (i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money as, 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." Section 67 provides that taxable value is the consideration whether in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he value of taxable service in terms of Section 67 of the Finance Act, 1994. The security deposit is received towards recovery of damages, if any, caused to the leased property by the lessee and it is not towards for the provision of any taxable service. The learned counsel also placed reliance on Australian Goods and Service Tax Ruling (GSTR) 2001/6 which deals with non-monetary consideration wherein it has been clarified by way of an example: "96. For example, if a tenant did not have an actual or implied obligation under a lease to keep the leased premises in good repair, it is likely that the landlord would require the tenant to make higher lease payments. However, if the tenant agrees to such an obligation, it is not consideration for the supply of the premises as it is not provided as compensation or value for the supply of the premises." 4.5. He also relies on the decision of the hon'ble Bombay High Court in the case of Commissioner of Income Tax vs. J.K. Investors (Bombay) Ltd. 248 ITR 723 (Bom.). The issue before the hon'ble High Court was whether the notional interest on security deposit should be considered for the purpose of calc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssable value. 4.9 It is accordingly, it is submitted that in the absence of specific provision in law and in the absence of any evidence led by Revenue to show that the security deposit taken has suppressed the rent, the impugned demands are not sustainable. 4.10 He further submits that extended period of time has been invoked for confirmation of demand. The issue involved in the present case is one of interpretation of statutory provisions. It is a settled position that in such matters, the question of invocation of extended period of time would nor arise and also question of imposition of penalty would also not arise. Accordingly, he pleads for allowing the appeals. 5. The learned Additional Commissioner (AR) appearing for the Revenue reiterates the findings of the adjudicating authority. He also points out that there are provisions in Maharashtra Stamp Act, 1958 which provides for calculation of stamp duty, notional interest @10% per annum on refundable security deposit in respect of registration of lease/leave and licence agreement. Therefore, similar provisions can be read into Finance Act, 1994 to enhance the value. He also submits that since the security deposit is taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Bombay High Court held that value of notional advantage, like notional interest, will not form part of actual rent received as contemplated by Section 23(1)(b) of the Income Tax Act. Similarly in Intercontinental Consultants and Technocrafts Pvt. Ltd. vs. Union of India & Anr. 2012-TIOL-966-HC-DEL-ST a question arose as to what is the scope of 67 of the Finance Act, 1994 and whether by way of rules it can be provided in law for inclusion of the expenditure or cost incurred by the service provider in the course of providing the taxable service. The hon'ble High Court held that as Section 67 authorises the determination of the value of the taxable service as the gross amount charged by the service provider in a case where the consideration for the service is money, it is only the value of such service that can be brought under service tax and nothing more and the quantification of the value of service can, therefore, never exceed the gross amount charged by the service provider for the service provided by him. The hon'ble apex Court in the case if ISPL Industries Ltd. (supra) also considered a similar question and held as follows: &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en influenced on the lower side by such a transaction of interest free advance. 12. In the appeals before us, neither there is any evidence or proof on the record nor it is the case of the appellant on facts, that the interest free advance has influenced the price and the price lower than the normal price had been charged by the respondents. We do not think it necessary to deal with facts of each case separately since it is not in dispute that interest free advances were made by the buyers but at the same time it is also not in dispute that such advances had never influenced the price charged by the manufacturers from buyers." 6.3 In the case before us, there is not even an iota of evidence adduced by the Revenue to show that the security deposit taken has influenced the price i.e. the rent in any way. In the absence of such evidence, it is not possible to conclude that the notional interest on the security deposit would form part of the rent. We also do not find any reason for adopting a rate of 18% per annum as rate of interest, which is neither the bank rate of interest for deposits or loans or the market rate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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