TMI Blog2019 (11) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... When a person from the first day enters into an agreement to purchase some property with an intention to sell it to some other person, it cannot be said that the transaction was of a transaction of simple sale and purchase of immovable property, in fact, the said act attracts the definition of Real Estate Agent and the participation of appellant in view of aforesaid transaction comes within the purview of Service Provider . Extended period of limitation - HELD THAT:- The act of appellant clearly shows that he suppressed the facts, therefore, the period of limitation is to be counted from the date of knowledge of the Departmental Authority as provided under sub-section 3(ii) of Section 11A of the Act of 1944 - the appellant has not shown specific source from which the income was received though income was showed in books of account which is a clear act of suppressing correct facts. For the aforementioned reason, the limitation will be counted from the date of knowledge. Imposition of penalty - HELD THAT:- The finding recorded by the Assessing Officer for imposition of penalty under Sections 77 and 78 of the Act of 1994 has been affirmed by the Appellate Authority as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,62,81,450/- has been generated from the sale of agricultural plot. The area of the agricultural plot appearing in the documents i.e. sale agreement and registered deed of sale has been shown to be 0.405 hectare or 43560 sq.ft. of land situated at village Jora, Teshil and District Raipur. With reference to aforementioned transaction, appellant produced the document of sale i.e. sale deed, which shows that one of the Directors, namely, Shri Deepak Agrawal entered into an agreement for purchase of land from one Hukum Chand Jain on non-judicial stamp paper dated 24/07/2006. The total consideration has been agreed between the parties was of ₹ 32,00,000/-, out of which, ₹ 1,00,000/- has been given in advance and balance amount is to be paid before the Registrar at the time of execution of sale deed. Subsequently, on 02/02/2007, the said agricultural plot has been sold to Raipur Entertainment World Pvt. Ltd. called Assignee and got the sale deed executed in favour of Assignee on consideration of ₹ 1,93,81,450/-, out of which, ₹ 1,61,81,450/- was received by the appellant. The sale deed was executed on 15/02/2007. 4. Similarly, during the year 2005-06, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the relevant provisions as mentioned in the Act of 1994, arrived at a finding that the demand raised by the Revenue is not time barred and activities of appellant comes within the definition of Real Estate Agent . The Adjudicating Authority also reached to the finding that noticee is not Purchaser or Seller of property, but was covered under the services of Real Estate Agent and held liable for payment of service tax of ₹ 44,41,774/- and education cess of ₹ 88,835/- as well as imposed penalty under Sections 77 and 78 of the Act of 1994. 7. The aforementioned order passed by the Adjudicating Authority was made to challenge before the Appellate Authority. The Appellate Authority after considering the grounds raised by the appellant and also considering the facts and circumstances of the case, dismissed the appeal and upheld the order passed by the Adjudicating Authority for the reasons recorded therein. 8. Against the order passed by the Appellate Authority, the appellant preferred an appeal before the CESTAT. The CESTAT also dismissed the appeal and upheld the order passed by Adjudicating Authority as well as Appellate Authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon the judgments passed by the Customs, Excise Service Tax Appellate Tribunal, West Zonal Bench Mumbai in the matters of Sarjan Realities Ltd. v. Commissioner of Central Excise, Pune-III reported in 2014 (36) S.T.R. 877 (Tri Mumbai) and Commissioner of Central Excise Nashik v. M/s Viraj Estates Pvt. Ltd. reported in 2017 SCC Online CESTAT 3036. He further relied upon the judgment passed by the Customs Excise and Service Tax Appellate Tribunal in the matter of CCE Raipur v. Shri Banke Bihari Ispat Pvt. Ltd. reported in 2018 SCC Online CESTAT 2369. He also placed reliance in the matter of Bharat Hotels Limited v. Commissioner, Central Excise (Adjudication) passed by the High Court of Delhi in CEAC25/2017, C.M.No.31344/2017 decided on 29/11/2017, Premium Real Estate Developers Rajat Yadav v. C.S.T. Service Tax-Delhi passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi in Appeal No.ST/50103-50104/2014-(DB) decided on 27/11/2018. 12. Per contra, learned counsel appearing for the Respondent/Revenue submitted that the business, in which, appellant is engaged is the business of steel castings and other collateral smelting industries, but on 01/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided or to be provided to any person, by a real estate agent in relation to real estate. 15. From perusal of facts of the case, it is clear that appellant entered into an agreement to purchase of land from the original owner, but did not execute the sale deed in its favour. The appellant got sale deed executed in favour of third party directly from the original owner of land. The appellant first entered into an agreement with the registered owner of land and paid a nominal amount as advance. It was mentioned in the agreement that he is having rights to sell the land to some other person from the date of execution of sale agreement. It was also mentioned that if the appellant in lieu of agreement executed by him with the original owner enters into an agreement with any other person/third party, then, the said agreement will be binding on the land owner and owner of the property will execute sale deed in his favour directly. On the difference of amount, the first purchaser/appellant only will have his rights. 16. From the aforementioned documents and materials, it cannot be accepted that transaction of sale and purchase of land is a simple sale and purchase o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of Pushpam Pharmaceuticals Company v. Collector of Central Excise, Bombay reported in 1995 Supp (3) SCC 462. 20. The Adjudicating Authority has considered the issue of 'suppression of fact' in detail with respect to date of knowledge in paragraphs-17.1 and 17.2, which is reproduced hereinbelow : 17.1 The contention of the Noticee in this regard is not correct in view of the Hon'ble High Court of Gujrat in the case of COMMISSIONER OF C. EX., SURAT-I Versus NEMINATH FABRICS PVT. LTD. Reported in [2010 (256) E.L.T. 369 (Guj)] wherein it has been held as under :- Termini from which period of one year or five years is computed is relevant date as defined in sub-section (3)(ii) of Section 11A of Central Excise Act, 1944-Concept of knowledge of departmental authority entirely absent- Importing of said concept in Section 11-A(i) ibid or the proviso ibid would tantamount to rewriting statutory provision and rendering defined term Relevant date nugatory-Reasoning, that once knowledge acquired by Department there is no suppression, fallacious as once suppression admitted, merely because Department acquires knowledge of irregularities, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997-Date of knowledge is attributable to 1997- Reply sent by respondent on 27/02/1997 for letter from Department-Limitation if computed from such date, show cause notice issued on 15/05/2000 within prescribed period of limitation of five years- Section 11A of Central Excise Act, 1994. 21. In the light of the law as laid down by Hon'ble Supreme Court and provisions of the Act, if facts of the case is considered, it is apparent that the appellant is a private limited company engaged in business and already registered for service tax is aware about the requirement of law for its registration and payment of service tax. The fact of nature of act attracting definition of 'Real Estate Agent' revealed during course of enquiry only. The appellant has not shown specific source from which the income was received though income was showed in books of account which is a clear act of suppressing correct facts. For the aforementioned reason, the limitation will be counted from the date of knowledge. 22. So far as the ground of imposition of penalty is concerned, as we have held that there was suppression of facts on the part of appellant, which was only gathere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is no error or infirmity in the said findings recorded by the Assessing Officer and affirmed by the Appellate Authority and the CESTAT. 24. On a specific query made by this Court, the appellant placed on record the minutes of meeting of the Board of Directors to show that they have entered into an agreement to purchase of land at village Chorhata in District Rewa (M.P.) for extension of their business establishment. The minutes of meeting dated 04/04/2004 shows that they have agreed to sell the land within three days of meeting, but they have not assigned any reason for doing so or it is nowhere mentioned that they have got some better land or property for extension of their business. 25. In view of aforementioned facts emerging in the minutes of meeting placed on record, the ground raised by learned counsel for the appellant that they have entered into an agreement for purchase of land at village Chorhata in District Rewa (M.P.) for extension of their business and their act of sale was also bonafide is not sustainable. 26. The case laws of M/s Viraj Estates Pvt. Ltd. (supra), Shri Banke Bihari Ispat Pvt. Ltd. (supra) and Sarjan Realities Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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