2015 (5) TMI 106 - AT - Service Tax

Waiver of pre-deposit - Extended period of limitation - Real Estate Agent - Suppression of facts - Penalty imposed under Section 76, 77 & 78 - Held that - Mentioning of different amounts in the first agreement to sale, one attributable to the sale of the land and the other to the nomination charges itself is indicative of the fact that the entire consideration mentioned in the agreement was not towards the value of the land. Further, reducing the sale value to ₹ 4.25 lakhs again raises doubts about the bonafides of the contract. Further, the fact of payment of consideration in the bank account of the appellant's wife, as also a part of the consideration in the appellant's bank account without giving details of the quantum of land owned by the appellant and also by his wife individually or jointly lead to the factual position, that the appellant was procuring the land from the other small land owners and without getting the same registered in his own name, was passing on the same to the developers, is indicative of the absence of bonafides on the part of the assessee. Issue has come to the knowledge of the Revenue by initiation of investigation in 2009 onwards. As per the learned advocate, the investigations which were started in February 2009 were completed in March 2009 and as such the show-cause notice issued in June 2011 has to be held as barred by limitation. Apart from the fact that the appellant did not came forward himself to place all the facts before the service tax authorities, we find no merits in the appellant's plea that the investigations were completed by March 2009. The appellants not being a part of the department, would not be in a position to say, with force, as to the conclusion of the investigations. The non-production of documents post March 2009 is not indicative of the fact that no further investigations were being carried out by the Revenue. Otherwise also, once suppression is attributed to the assessee, longer period of limitation is available to the Revenue. - Decided against assessee.

Summary

Issues:
1. Confirmation of service tax along with penalties under Section 76, 77, and 78 of the Finance Act 1994 against the appellant.
2. Whether the appellant can be considered a Real Estate Agent when selling his own land to developers.
3. The demand on the point of limitation and the applicability of the Hon'ble Supreme Court decision in Uniworth Textiles Ltd. Vs CCE Raipur [2013 (288) E.L.T. 161 (S.C.)].
4. The Tribunal's decision on an identical issue in a previous case and the direction to deposit a part of the service tax demand.
5. The issue of limitation based on the initiation of investigations by the Revenue and the completion of investigations by the appellant.

Analysis:
1. The judgment confirmed the service tax of &8377; 61,20,000 against the appellant, along with penalties under Section 76, 77, and 78 of the Finance Act 1994. The appellant, involved in a deal with a company for selling land, argued that he cannot be considered a Real Estate Agent as he was selling his own land. However, the findings indicated that the consideration received was for services provided as a Real Estate Agent, leading to the confirmation of the service tax.

2. The appellant contested the demand on the point of limitation, citing the completion of the deal in February 2006 and the investigation starting in 2009. Referring to a Supreme Court decision, the appellant argued that mere non-payment of duties does not imply willful misstatement. However, the Tribunal found that the investigations continued beyond 2009, allowing a longer period of limitation for the Revenue. The appellant was directed to deposit &8377; 20,00,000 towards service tax within eight weeks.

3. The Tribunal referenced a previous stay order involving similar circumstances and directed the appellant to deposit a part of the service tax demand, following the same criteria. The judgment emphasized the importance of factual evidence in determining suppression, misstatement, or collusion, highlighting the need to evaluate each case based on its unique facts and circumstances.

4. The judgment analyzed the appellant's actions, such as mentioning different amounts in agreements and transferring consideration to multiple bank accounts, to infer the absence of bonafides. Despite the appellant's arguments on limitation and financial hardship, the Tribunal upheld the decision to confirm the service tax demand and penalties, emphasizing the significance of factual evidence and adherence to established criteria in such cases.