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TMI Blog2018 (8) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... t be added for the purpose of levy of service tax on renting of immovable property. There is no justification for inclusion of the notional interest in the consideration for payment of service tax - appeal allowed - decided in favor of appellant. - S. T. Appeal No. 51740 of 2015 - ST/A/52551/2018-CU[DB] - Dated:- 16-7-2018 - Mr. V. Padmanabhan, Member (Technical) And Ms. Rachna Gupta, Member (Judicial) Ms. Rinki Arora, Advocate for the appellant Sh. Sanjay Jain, AR for the Respondent ORDER Per: V. Padmanabhan: The present appeal is filed by the appellant against the Order-in-Appeal No. 86(SLM)ST/JPR-I/2014 dated 03/05.12.2014 passed by the Commissioner (Appeals), Central Excise Customs, Jaipur. 2. The app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II -2014-TIOL-1728-CESTAT-MUM. wherein the Tribunal has taken the view that notional interest on interest free security deposit cannot be added for the purpose of levy of service tax on renting of immovable property. 4. On behalf of Revenue, Sh. Sanjay Jain, ld. AR submitted that the lease agreement entered into by the appellant with M/s Vibrant Academy (India) Pvt. Limited specifies in para 4 that out of the total deposits amounting to ₹ 49,20,000/-, the amount of ₹ 41 lakhs will be adjusted towards rent for the last five months for the lease period and balance returned to the lessee. Accordingly, he opposes the contention of the appellant that the security deposit was an interest free deposit to take care of damages. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, there is not even an iota of evidence adduced by the Revenue to show that the security deposit taken has influenced the price i.e. the rent in any way. In the absence of such evidence, it is not possible to conclude that the notional interest on the security deposit would form part of the rent. We also do not find any reason for adopting a rate of 18% per annum as rate of interest, which is neither the bank rate of interest for deposits or loans or the market rate of interest. Adoption of such an arbitrary rate militates against the concept of valuation. In view of the foregoing, we hold that notional interest on interest free security deposit cannot be added to the rent agreed upon between the parties for the purpose of levy of service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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