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TMI Blog2018 (4) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... put to use for manufacturing purpose - the said value/ consideration is not towards the lease rent, which is collected by the appellant from various lessees towards the loan taken by the principal sugar factory YSSK. The issue of inclusion of the consideration/ expenditure made on repairs and maintenance cannot be included for demand of tax under Renting of property services is now settled by the Bench in the case of Maharashtra State Co-op Bank [2017 (9) TMI 298 - CESTAT MUMBAI], where it was held that the said expenditure cannot be considered as extra consideration towards the lease rent. Lease rent is the only amount which is received by the appellant on account of lease of the premises to the lessee. Therefore, the demand on expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in short) took over the business of sugar factory in the name of Yashwant SSK Ltd. (YSSK in short) for non-payment of loan. SDCC leased out the sugar factory to Rajaram Bapu Patil SSK Ltd. (RBPSSK in short) on consideration of amount as lease rent. As per the scheme of arrangement, the amount of lease rent paid by RBPSSK was to be paid to SDCC and repair and maintenance of the said machinery was to the account of RBPSSK. SDCC terminated agreement with RBPSSK and entered into another agreement with M/S K.M. Sakhar Karkhana Pvt. Ltd. (KMSKPL in short). They also received lease rent from KMSKPL. On investigation, it was noticed that the appellant SDCC had not discharged the Service Tax liability on the amount received as lease rent from the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des, we find that the issue that falls for consideration is whether the value of repair and maintenance, which was incurred by RBPSSK, on the sugar factory needs to be included on the value, as received for renting of immovable proper or otherwise; and whether consequential interest and penalties on demand on such value needs to be upheld. 7. The facts as narrated in paragraph 3 are not disputed. It is also to be noted that the adjudicating authority in the impugned order has specifically recorded that the lessee RBPSSK had undertaken the repair and maintenance of the plant and machinery of the sugar factory before it was put to use for manufacturing purpose. In our considered view the said value/ consideration is not towards the lease r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d penalty, we find that as the issue was recovery of the loan debited by the principal debtor YSSK and in order to salvage the loan, the appellant have leased out the factory to various manufacturers that could be an interpretation regarding Service Tax liability under the category of renting of immovable property service, however, we hold that the interest liability arises on the appellant in respect of amount received as lease rent and that needs to be discharged if not done so. 9, As regards penalty, since we have held that the amounts spent towards repair and maintenance cannot be included in the value for calculating tax liability, penalty imposed by the adjudicating authority on the appellant herein needs to be set aside and we do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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