2013 (8) TMI 677 - AT - Service Tax

Real Estate Agent Service u/s 65 (88) - service tax on transfer charges received from its clients for substituting the names of new prospective purchasers of immovable property/real estate transactions in the place of prospective purchasers who had initially agreed to purchase the properties - Extended period of limitation was invoked for passing the order of assessment. Held that -The service provided by the assesse in substituting names of prospective buyers of real estate, in its records, for which it collects transfer charges, does constitute real estate agent service, as defined in Section 65 (88) of the Act - real estate agent service mean any service provided or to be provided to any person in relation to sale , purchase, leasing or renting of real estate including a real estate consultant - Since substitution of the names of prospective buyers, was an activity which was primarily in relation to sale of real estate - the concurrent conclusions by the authorities below suffer from no infirmity - extended period of limitation was invoked to assess tax liability - 50% of the duty was ordered to be paid as pre-deposit - upon such submission rest of the duty to be stayed till the disposal - Stay Granted.

Summary

Issues:
1. Appeal against separate adjudication orders confirmed by the Commissioner (Appeals) for different periods.
2. Invocation of extended period of limitation in the first case and normal period of limitation in the second case.
3. Determination of service tax liability for various services provided.
4. Interpretation of whether the activity of substituting names of prospective buyers of real estate constitutes real estate agent service.
5. Request for waiver of pre-deposit based on interim orders in similar cases.
6. Granting of waiver of pre-deposit and stay of further proceedings subject to conditions.

Issue 1:
The appeals were filed against separate adjudication orders confirmed by the Commissioner (Appeals) for different periods, one pertaining to 2005-08 and the other to 1.4.09 to 31.1.09. The service tax liabilities assessed in these orders, along with interest and penalties, were challenged by the appellant/assessee.

Issue 2:
In the first case, the extended period of limitation was invoked to assess the tax liability, while in the second case, the assessment was conducted within the normal period of limitation. This difference in the periods of limitation raised procedural concerns regarding the validity of the assessment orders.

Issue 3:
The appellant, registered for various services including architecture, renting of immovable property, maintenance, repair, and transport of goods by road, faced allegations of not disclosing receipts of transfer charges in ST-3 returns and failing to remit the consequent service tax. The Anti-Evasion branch initiated proceedings based on these allegations.

Issue 4:
The central issue revolved around whether the activity of substituting names of prospective buyers of real estate, for which the appellant collected transfer charges, constituted real estate agent service as defined in Section 65(88) of the Act. The Tribunal analyzed various interim orders and concluded that such activity fell within the ambit of real estate agent service.

Issue 5:
The appellant sought a wholesale waiver of pre-deposit of the adjudicated liability, relying on interim orders in similar cases. The Tribunal considered the arguments presented in those orders and decided to grant a waiver of pre-deposit and stay further proceedings subject to specific conditions.

Issue 6:
Considering the circumstances, the Tribunal granted a waiver of pre-deposit and stayed all further proceedings contingent upon the appellant remitting a specified percentage of the assessed service tax liabilities within a given timeframe. Failure to comply with these conditions would result in the dismissal of the appeals.

This comprehensive analysis covers the various issues addressed in the judgment, including procedural aspects, service tax liabilities, interpretation of legal definitions, and the decision on the request for a waiver of pre-deposit.