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2017 (9) TMI 1071

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..... ondent under this category. Maintenance or repair service - Held that: - Advice or consultancy rendered by the appellant is not covered by maintenance or repair of immovable property. Admittedly the appellants are not involved in any activity of management, maintenance or repair. Maintenance charges attributable to the money collected from the owners of plot/flat/office for maintenance of the said properties - Held that: - the entire building which was maintained and managed by the appellant/assessee for a consideration is for the collective benefit of the owners of the individual units in the building. Each owner is collectively and severely got the benefit of said maintenance - the consideration paid by the owners of flat/plot/office is liable to service tax - demand upheld. Time limitation - Held that: - the appellant/assessee is a well organized large scale real estate developer. As such, it is not tenable for them to submit that they were not fully aware of the legal implications of various service tax entries applicable to them - there is no bonafide belief in the present case for non-payment of service tax in time - extended period rightly invoked. Appeal dismiss .....

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..... oner dropped demands under management consultancy service , real estate agency service and advertising service . A part of demand under the categories of management, maintenance and repair service and business auxiliary service totally amounting to ₹ 1,06,080/- has been confirmed by the Original Authority alongwith equal amount of penalty under Section 78 and further penalties under Section 77 of the Finance Act, 1994. Aggrieved by this order, the Revenue filed this appeal. The respondent also filed a cross objection contesting the grounds of appeal by Revenue as well as against the confirmation of a part of demand by the Original Authority, as mentioned above. 3. The learned AR elaborating the grounds of appeal submitted on the following points :- (a) The Commissioner has erred in holding that services provided by the assessee in relation to transfer of knowhow does not fall under the definition of management consultant service and hence not chargeable to service tax. Clauses 1.1 to 1.6 of the agreement entered into by the respondent with their client clearly bring out that the respondent has valuable knowledge, expertise and experience in the field of development .....

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..... on to evade payment of duty on the same ground there can be no penalty imposed on the respondent. 6. We have heard both the sides and perused the appeal records. 7. The first point for decision is the correctness of findings recorded by the Commissioner in respect of tax liability of the respondent under the category of management consultancy service and real estate agent service . We have carefully perused the findings recorded by the Original Authority and the objections raised by the Revenue. Admittedly, the respondent has expertise and experience in the field of real estate projects. They have a set of know-how which will help the client who is engaged in real estate project. The terms of agreement, also relied on by the Revenue in the present appeal, clearly brings out that the respondent are transferring know-how one time and furnished documents relating to real estate development projects, including group housing projects. The know-how is suitable and complete, which will enable the client to plan and execute the real estate development projects, including group housing projects, in a more profitable and efficient method. On careful consideration of the scope of the .....

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..... present case. 9. The respondents were sought to be taxed under the category of real estate agent s service in terms of Section 65 (88) (89) of the Finance Act, 1994. The statutory provision of the tax entry are as below :- Section 65 (88) and (89) of the Act, 1994, defines the real estate agent and real estate consultant as under: (88) real estate agent means a person who is engaged in rendering any service in relation to sale, purchase, leasing or renting, of real estate and includes a real estate consultant; (89) real estate consultant means a person who renders in any manner, either directly or indirectly, advice, consultancy or technical assistance, in relation to evaluation, conception, design, development, construction, implementation, supervision, maintenance, marketing, acquisition or management, of real estate; Section 65 (105) (v) defines taxable service in relation to Real Estate Agent as under : taxable service service means any service provided or to be provided to any person, by a real estate agent in relation to real estate and the term service provider shall be construed accordingly . 10. The Revenue contended that .....

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..... such activity of providing advice cannot by itself be categorized as management, maintenance or repair service. On careful examination of the statutory definition and the analysis made in para 3.5.1 of the impugned order we note that there is nothing in the present grounds of appeal by Revenue to persuade us to interfere with the said findings. Advice or consultancy rendered by the appellant is not covered by maintenance or repair of immovable property. Admittedly the appellants are not involved in any activity of management, maintenance or repair. 12. The Original Authority confirmed service tax liability on the appellant with reference to maintenance charges attributable to the money collected from the owners of plot/flat/office for maintenance of the said properties. The appellant/assessee contested their tax liability in the cross objection. We note that the entire building which was maintained and managed by the appellant/assessee for a consideration is for the collective benefit of the owners of the individual units in the building. Each owner is collectively and severely got the benefit of said maintenance and as such we are in agreement with the Original Authority that .....

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