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TMI Blog2015 (9) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... f shrubs, grass and rubbish etc. classifiable under the head 'site formation and clearance excavation and earth moving and demolition services', as defined under Section 65 (97a) of the FA. - It further prima facie appears that the AA overlooked the fact that even as per the SCN no land in Allahabad was purchased although the Appellant received ₹ 4 crores for that purpose. The Appellant's explanation that it returned the said sum to SICCL in the form of shares of 2 of its group companies does not appear to have been considered. A further question that would arise is whether the entire profit generated from the purchase of land in Jodhpur can be taken to be value of the taxable services, if any, rendered by the Appellant. Those que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed around 100 to 150 acres of land. SICCL entered into Memoranda of Understanding (MOUs) with M/s. Sahara India (SI) which in turn entered into two separate MOUs dated 20th June 2006 and 20thAugust 2003 respectively for purchase of land in Allahabad and Jodhpur. The MOUs specified the extent of land to be purchased and the rate of land per acre at which SI would purchase land at each of the cities. The Appellant was entitled to difference, if any, of the amount actually paid for purchase of land to the original owners of land and the agreed rate between the Appellant and SI. In other words, the Appellant was entitled to the profit/loss on account of purchase and sale of the land. 3. A show cause notice ('SCN') dated 22nd Octobe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. The AA, however, agreed with the contention of the Appellant that the cost/value of land cannot be included in the gross value for levy of service tax. Nevertheless, in proceeding to determine the service tax payable, the AA stated that in the absence of the Appellant providing the necessary details, the entire sum received by it would be considered as the taxable value for the purpose of computation of service tax. In other words the taxable value was taken as ₹ 9,62,98,304 and service tax liability, interest and penalty were determined on that basis for the period 1st January 2004 to 31st March 2008. It may be noted here that in the said adjudication order the AA recorded that for the purchase of land in Jodhpur the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that while the Appellant made a profit as regards the purchase of land in Jodhpur, the amount received for the purchase of land in Allahabad was returned by it in the form of allotment of shares in 2 group companies in favour of SICCL. He submitted that with the AA having agreed with the Appellant that the entire sum received by the Appellant for purchase of land could not form the basis for computation of the service tax, there was no logic in the AA proceeding to raise a demand of service tax in the sum of ₹ 98,22,427 calculated on the taxable value of ₹ 9,62,98,304. Interest and penalty were also calculated on that basis. The impugned order requiring the Appellant to deposit 25% of the said sum was unreasonable particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a real estate agent/real estate consultant under Section 65 (89) of the FA and the other relating to levelling of soil including filling of gorges/nallah, removing of shrubs, grass and rubbish etc. classifiable under the head 'site formation and clearance excavation and earth moving and demolition services', as defined under Section 65 (97a) of the FA. Whether in fact the three MOUs reflect that the Appellant was acting as an agent of SICCL and that it had rendered taxable services to SICCL (although the MOUs have been entered into by it with SI) is arguable and will have to be examined by the CESTAT when the appeals before it are heard. 12. Secondly, the Court is of the view that the Appellant has made out a prima facie case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant. Those questions cannot obviously be examined at this stage but will have to await the final determination in the appeal before the CESTAT. 14. The Court is satisfied that the Appellant has made out a prima facie case and that the balance of convenience at this stage in making a conditional order of pre-deposit is in favour of the Appellant. 15. Although the Court is not expressing any opinion on the contention of the Appellant that no taxable service has been rendered by it, and that in any event the entire profit earned by it cannot constitute the value of such services, the Court, for the purposes of determining the reasonable amount of pre-deposit to be made by the Appellant, takes note of the fact that the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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