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2017 (9) TMI 298

Renting of immovable property Service - rent received from the lessee - repair and maintenance expenditure incurred by the lessee for the repair and maintenance of leased premises - Held that: - As regards the demand on service tax on repair and maintenance expenditure, we find that this amount is not towards lease rent - 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. - Lease rent - Held that: - According to agreement there is a lease rent fixed between the appellant as a lessor and the lessee. .....

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SERFAESI Act, 2002 took over the actual and physical exclusive possession of the immovable property along with plant and machinery. In order to recover balance dues the appellant have decided to lease out seized property for the lease rent. Against the letting of the seized property, the appellant received the lease rent. The department has issued a show-cause notice raising demand of service tax on rent received from the lessee and also on the repair and maintenance expenditure incurred by the lessee for the repair and maintenance of leased premises. The adjudicating authority confirmed the demand of service tax on the service under the head of renting of immovable property. Therefore, the appellants are before us. 2. Shri Rajeev Waglay, l .....

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's assesee code. This is evidenced from service tax challan enclosed at Page 42 to 49 of compilation of appeal No.ST/85192/13, the total of which comes to ₹ 46,62,492/- which is more than the service tax payable of ₹ 44,35,604/- on the rent received from that property on cum tax basis. He also submits that the question involved is of interpretation of law as who was liable to pay the service tax and as such the extended period could not have been invoked. He placed reliance on the judgement in the case of Sujana Metal Products - 2016 (342( ELT A115 and Persistent System Ltd. - 2016 (45) STR 177 (Tri-Mum). He also submits that as regards the demand related to M/s.Raje Vijay Singh Dafale Sahakari Sakhar Karkhana Ltd. cum tax d .....

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t this amount is not towards lease rent. After leasing of the property it is up to the lessee to carry out the necessary repair and maintenance and the consideration on that count does not flow from lessee to lessor (appellant). Therefore, 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. Accordingly, we set aside the demand related thereto. 4.1 On the second count the demand is as lease rent the submission of the appellant is that since the lease rent towards the recovery of outstanding dues, the same .....

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