9911796707
TMI Blog2022 (11) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... against towards trading of shares which is subsequently refunded without utilizing the same. 2. Shri Sudhansu Bissa, Learned Counsel appearing on behalf of the appellant submits that in the appellant's own case this tribunal vide order No. A/10338-10339/2022 dated 12.04.2022 held that the deposit taken by the appellant as a security deposit is not liable to Service Tax. Therefore, the issue is no longer res integra, as the present case is for different period only whereas facts and legal issue is common. 3. Shri G. Kirupanandan, Learned Superintendent (Authorized Representative) appearing on behalf of the revenue reiterates the finding of the impugned order. 4. We have carefully considered the submissions made by both the sides and perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt collected by the Appellant from the clients is in fact an interest free refundable deposit and is not towards any advance for a service. It is, therefore, not taxable. 4.1 We further find that Section 67 provides that taxable value is the consideration whether in monetary or monetary form. Therefore, if any benefit accrues to either party which is not in the nature of consideration agreed upon by the parties, the same is not liable to be added to the value of service in terms of Section 67. Further, there is no deeming provision for increasing the value of consideration either in Section 67 or in the Service Tax (Determination of Value) Rules, 2006 framed thereunder. Here, the deposit is taken for a different purpose. Thus, the said de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s payable but the amount charged has to be necessarily a consideration for the service provided which is taxable under the Act. By using the words "for such service provided" the Act has provided for a nexus between the amount charged and the service provided. Therefore, any amount charged which has no nexus with the taxable service and is not a consideration for the service provided does not become part of the value which is taxable under Section 67. The cost of free supply of goods provided by the service recipient to the service provider is neither an amount "charged" by the service provider nor can it be regarded as a consideration for the service provided by the service provider. In fact, it has no nexus whatsoever with the taxable ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notional interest on the security deposit would form part of the rent. We also do not find any reason for adopting 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." (ii) In the case of Murli Realtors Private Limited Others. v. Commissioner of Central Excise, Pune-III [2015 (37) S.T.R. 618 (Tri. - Mumbai)], a Division Bench of the Mumbai Tribunal made the following observations with regard to the security deposit towards the renting of immovable pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional interest cannot be automatically included in the sale price for the purpose of levy. In the absence of a provision in law providing for a notional addition to the value/price charged, the question of adding notional interest on the security deposit as a consideration received for the services rendered cannot be sustained and we hold accordingly." (iii) In M/s. ATS Township Private Limited v. Commissioner, Central GST, Noida [2019 (11) TMI 297 (CESTAT-Allahabad)], a Division Bench of this Tribunal observed as follows : "3. The issue relates to inclusion of the amount collected by the appellant as IFMS. Revenue's contention is that the said collected amount would fall under the category of 'Management Maintenance and Repair Service ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
