TMI Blog2019 (3) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... al interest on interest free security deposit cannot be added to the rent agreed upon between the parties for the purpose of levy of service tax on renting of immovable property. The above decision is given in respect of notional interest on security deposit taken for rent but the principle enunciated therein will apply to notional interest on refundable security deposit taken for maintenance service also. There is no justification for inclusion of the notional interest in the consideration for payment of service tax - appeal allowed - decided in favor of appellant. - Appeal No. ST/53198/2015-CUS(DB) - FINAL ORDER NO. 50228/2019 - Dated:- 9-1-2019 - Shri Anil Choudhary, Member (Judicial) And Shri Bijay Kumar, Member (Technical) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating authority vide Order in Original No. 07/2012-13 dated 14.12.2012. Against the said confirmation Appellant filed Appeal before Commissioner (A) Jaipur. The said Appeal was rejected by the Commissioner (A). Hence the present Appeal. 3. Mr. Dhruv Tiwari Ld. Adovcate appearing for Appellant submits that issue of inclusion of national interest on security deposited has been settled by this Tribunal in various cases wherein it is held that notional interest on security deposit cannot be added in the value of service and service tax cannot be demanded on the said notional interest. In support of its argument he relied on following decisions. (i) Murli Realtors Private Ltd V/s Commissioner of Central Excise, 2014-TIOL-1728- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of utility charges or for damages, if any, cause to the leased property. Thus, the security deposit serves a different purpose altogether and it is not a consideration for leasing of the property. The consideration of the leasing of the property is the rent and, therefore, what can be levied to service tax is only the rent charged and no notional interest on the security deposit taken can be levied to tax. There is no provision in service tax law for deeming notional interest on security deposit taken as a consideration for leasing of the immovable property. Therefore, in the absence of a specific provision in law, as held by the hon ble apex Court in the case of Moriroku UT India (P) Ltd. (supra), there is no scope for adding any not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a rate of 18% per annum as rate of interest. Adoption of such an arbitrary rate militates against concept of valuation. In view of the foregoing, we hold that notional interest on interest free security deposit cannot be added to the rent agreed upon between the parties for the purpose of levy of service tax on renting of immovable property. 7. We find that above decisions are given in respect of notional interest on security deposit taken for rent but the principle enunciated therein will apply to notional interest on refundable security deposit taken for maintenance service also. 8. By following the principal laid down in the above decision, we find no justification for inclusion of the notional interest in the consideration fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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