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TMI Blog2017 (1) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... d when an allottee defaults in his payment schedule and for that reason allotment is cancelled. In such cases, if the allottee approaches for restoring the allotment, restoration charges are levied - such charges are in the nature of a penalty imposed on the allottee to cover damages caused by his default in payment - such charges cannot be considered as a service charge liable for levy of service tax. Transfer charges - Held that: - A person who is engaged in rendering any service in relation to sale of real estate is liable to pay service tax under the Real Estate Agent Services - the transfer charges would be liable for payment of service tax under the above category. Matter remanded to the Adjudicating Authority to re-compute the demand within the normal period of limitation - penalties set aside - appeal allowed by way of remand. - Service Tax Appeals No. 1685 of 2010 and 1107 of 2011 - 56031-56032/2016 - Dated:- 22-12-2016 - Ms. Archana Wadhwa, Member (Judicial) And Shri V. Padmanabhan, Member (Technical) Ms. Priyanka Goel, Advocate - for the appellant. Shri Sanjay Jain, Authorized Representative (DR) - for the Respondent. Per . V. Padmanabhan :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sanjay Jain, learned DR for the Revenue. 3. The main submission of the learned Counsel was that till the date of completion of construction and full payment of the agreed sum and execution of sale deed in favour of the buyer of the property, the ownership of the property continues to remain with the developer. He submits that any amounts recovered till this date would be in the nature of self-service and consequently would not attract service tax. He relied upon the following case laws :- (a) CST vs. Sujal Developers reported in 2013 (31) S.T.R. 523 (Guj.) ; (b) Monsanto Manufacturer Pvt. Ltd. vs. CCE ST reported in 2014 - TIOL - 550 - HC - ALL - ST. 4. Learned DR on the other hand supports the order passed by the Adjudicating Authority. He submits that all these charges recovered are towards the sale of Real Estate and, hence, are liable for service tax under the entry for Real Estate Agent Service. He also relied upon the Tribunal decision in the case of Ajay Enterprises Pvt. Ltd. vs. CST, Delhi reported in 2016 (42) S.T.R. 471 (Tri. - Del.). 5. The Real Estate Agent Service has been defined under Section 65 (88) of the Finance Act, 1994 is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for levy of service tax. 8. The transfer charges are recovered when the original allottee gives up his allotment even before the flat is fully constructed, ready for transferred. At this stage, if a new buyer approaches for taking over the allotment of the flat, the appellant transfers the original allotment of the flat from the initial allottee to the new buyer. In such cases, the transfer charges are levied on the new buyer on which service tax has been levied under the category of Real Estate Agent Services. The transfer charges are the consideration recovered by the appellant in connection with re-allotment of the apartment to the new buyer. In terms of the definition of the term sale under the Transfer of Property Act, 1882, the transfer of title from one buyer to another is covered within sale when a builder allots a flat to a buyer. Even if it is not completed a right gets vested in the allottee to the extent of a portion of the undivided share of the land as well as in the form of entitlement to get the flat when completed. During the process of transfer of the allotment to the new buyer, this right vested in the original allottee gets transferred to the new allottee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btedly accounted for all the transactions in the statutory records. But the primary adjudicating authority held that the appellant was guilty of wilful misstatement/suppression of facts with intention to evade Service Tax as it never approached the Department to ascertain the details of their liability to pay Service Tax and the evasion would have gone undetected but for the investigation by the Department. In this regard it is pertinent to mention that in case of a bona fide belief about the non-taxability of certain transactions, the appellant would not approach Revenue for any clarification because clarification is sought only when there is some confusion/doubt. In case of CCE v. Chemphar Drugs Liniments [2002-TIOL-266-SC-CX = 1989 (40) E.L.T. 276 (S.C.)] Supreme Court held that something positive other than mere inaction or failure on the assessee s part or conscious withholding of information when assessee knew otherwise is required for invoking extended period. In the case of Continental Foundation Joint Venture v. CCE [2007 (216) E.L.T. 177 (S.C.)] Supreme Court went to the extent of saying that any incorrect statement by itself cannot be equated with wilful mis-st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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