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Jaipur Municipal Corporation Deen Dayal Versus Commissioner of Central Excise And Service Tax, Jaipur-I

2015 (7) TMI 197 - CESTAT NEW DELHI

Service Tax on lease of land for 99 years - whether in nature of Renting of Immovable Property or sale - invocation of extended period of limitation - Held that:- As per Rule 3, the outright sale of the land is actually abandoned and it allows only lease-hold rights. The judgment of Rajasthan High Court in the case of Shri K.P. Sharma [2012 (5) TMI 578 - RAJASTHAN HIGH COURT] only states that 99 year lease is "virtual" sale. In other words, it is not sale per se. Such lease rent is clearly liabl .....

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igh Court in the case of Home Solution Retail India (2009 (4) TMI 14 - DELHI HIGH COURT) actually held that there was no service in renting of immovable property. Though the said Delhi High Court judgment has since been reversed it clearly showed that there was a genuine confusion in this regard. there is a good case to grant stay in respect of the impugned demand pertaining to the period beyond normal period of one year. - Partial stay granted. - Application No.ST/STAY/58942/2013-CU[DB], Appeal .....

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pugned demand was confirmed under 'Renting of Immovable Property' service on the lease rent recovered by the appellant for the period 2006-07 to 201 -11 (upto September, 2011). 2. The appellant has contended that (i) it had sold the plots on 99 year lease and therefore it was a sale, (ii) the major part of the' lease sale' proceeds were deposited in the consolidated fund of State of Rajasthan, (iii) as per the Rajasthan Municipalities (Disposal of Urban Land) Rules, 1974 (hereina .....

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value addition and cannot be regarded as service. In the light of the said judgement, its bona fide belief that there was no service rendered was not misplaced, (v) In the case of Greater Noida Industrial Development Authority Vs. CCE, Noida - ST/3256/2012-CU(DB), the CESTAT has not upheld the invocation of extended period referring to the amendment made with reference to land in the definition of renting of immovable property and that in the present case also the same issues arises, (vi) In the .....

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s transfer of lease-hold rights only". Thus the amount received by the appellant was only for transfer of lease-hold rights only and thus was only towards lease rent. Further, Rajasthan Municipalities (Disposal of Urban Land) Rules, 1974 are subordinate legislation of a State which cannot over-ride the provisions of the Transfer of Property Act, which is a Federal (Central Act). Indeed even Rule 3 of the said Rule states as under:- "3. Land to be sold on lease hold basis. - The outrigh .....

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