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TMI Blog2023 (10) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... arket as plot / land to individual customers for residential construction. It was also noticed that the appellant has realized an amount of Rs.14 crores being the assignment fee / nomination fee for causing the sale of land and had not discharged service tax on such receipts. Further verification of the ledger of the appellant, it was noticed that the appellant had allegedly managed the construction of a project belonging to M/s Golden Constructions and charged management fee of Rs 85/- per square feet. It was felt that construction management normally starts with some level of conception, design and implementation of the project. Such works are carried out only by qualified persons. Hence it was felt that they have provided 'Consulting Engineer Service' to M/s. Golden Constructions. The service was taxable from 07/07/1997 and the appellant accounted receipt of consideration for providing the service in the balance sheet of the year 2006-07. However, the appellant neither paid service tax nor had taken registration for the said service. Further it was also noticed that the appellant has not paid any service tax on the GTA service which was introduced with effect from 1.1.2005. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h came into force from 01/05/2006. They have however paid the tax only after receipt of OIO. As regards the demand on GTA service, he stated that they have paid service tax on the same before issue of SCN. Since there was no mens rea involved and they had paid duties with respect to project management and goods transport, hence invoking the larger period in their case was bad in law. He cited case laws in their favour and prayed that the impugned order be set aside. 4.2 The learned AR has drawn attention to the following judgments of CESTAT cited in the impugned order to support Revenue's stand: i) Gauri Ganesha Real Estates [2012 (28) STR] and ii) Prem Steels (P) Ltd [2009(14) STR 748] He further reiterated the points given in the impugned order on behalf of Revenue. He prayed that the order may be upheld. 5 We find that the main dispute relates to tax demanded on 'real estate agent' service. The appellant has challenged the taxability of the assignment fee / nomination fee received by them for causing the sale of land to JC as a 'real estate agent' service. The appellant has referred to the judgment of a Coordinate Bench of this Tribunal in Nilesh T Patel Vs Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no role to play in it. The money received by them was to compensate them for the cost incurred and profit lost by them due to the deal. d) The said 1.90 acres was sold by JRBS to JC for a sum of Rs 16,15,00,000/- as per 'Deed of Absolute Sale' dated 26/11/2007. This is Rs 35,00,000/- short of the money he would have received had the original sale to the appellant gone through. The facts above show that there are discrepancies in the appellants narration, it may hence be profitable to look at the relevant parts of the various Agreements signed to understand the issue better. 8. The different Agreements forming a part of this issue are discussed below. 8.1 AGREEMENT TO SELL BETWEEN THE APPELLANT AND JRBS Relevant paras of the 'Agreement to Sell' are reproduced below: "NOW THIS AGREEMENT WITNESSES AS FOLLOWS Undertaking to sell 1. In consideration of a sum of Rs.16,50,00,000/- (Rupees sixteen crores fifty lakhs only) to be paid by the purchaser to Rs.16,50,00,000/- the vendor in the manner specified in Clause 2 below, the Vendor hereby agrees and undertakes to sell the land described in the Schedule hereunder (hereinafter referred to as the Said Property) to the purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the sale price agreed upon JRBS who was to get Rs 16,50,00,000/- if the appellant had purchased the land now gets only Rs 16,15,00,000/- (i.e. a loss of Rs 35,00,000/-). The Agreement also acknowledges the dominant role of the appellant in facilitating the sale of the 1.90 acres of land due to the following reasons:- i) It was the appellant who instructed M/s Jesus Call to pay JRBS an amount of Rs 16,15,00,000 by 26/11/2007. The very date by which they (appellant) were required to pay JRBS to buy the land. ii) JRBS now agreed to receive only Rs.16,15,00,000/- from JC for the sale of land as per the directions of the appellant who caused the sale. iii) the appellant received Rs 14,00,00,000/- as 'assignment / nomination fee' for 'causing the sale of land'. iv) the appellant did not sign the ultimate sale deed between JRBS and JC as a confirming party. 8.3 DISCUSSIONS ON THE CLAIMS MADE BY THE APPELLANT a) Advance: The appellant claims to have made an advance payment to JRBS for purchase of land. It is seen that this payment is purportedly made even before JRBS took possession of the title of the land. The Original Authority did not find any proof of this payment fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion", see these titles. . . . (Page 354) ASSIGNMENT. A transfer or making over to another of the whole of any property, real or personal, in possession or in action, or of any estate or right therein. . . (Page 153) NOMINATE. To name, designate by name, or appoint. Wilson v. Stump, 310 Mass. 614, 39 N.E.2d 416, 418; to name, designate, or propose for election or appointment. State ex rel. Pittman v. Barker, 113 Fla. 865, 152 So. 682, 683, 94 A.L.R. 1481, for an office, a privilege, a living, etc. . . . (Page 1199) FEE. A charge fixed by law for services of public officers or for use of a privilege under control of government. Fort Smith Gas Co. v. Wiseman, 189 Ark. 675, 74 S.W.2d 789, 790. A recompense for an official or professional service or a charge or emolument or compensation for a particular act or service. Craig v. Shelton, 201 Ky. 790, 258 S.W. 694. A fixed charge or perquisite charged as recompense for labor and trouble, a reward, compensation, or wage given to a person for performance of professional services or something done or to be done. People v. Goulding, 275 Mich. 353, 266 N.W. 378, 379. . . . (pages 740 and 741) Compensation in such situations represents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, he who asserts must prove. The appellant who has asserted this view should prove the point but has failed to do so. The appellants explanation have some discrepancies. They are: i. Para 5 of the agreement to sell between JRBS and the appellant dated 26/07/2007 restrained JRBS from encumbering, creating a charge over or otherwise dealing with the said property in a manner contrary to the terms of the agreement. This being so JRBS could not immediately after signing the agreement have started to look out and find another buyer for the land, an act which was specifically prohibited by the agreement dated 26/07/2007. Instead, it was the appellant as the to-be owner of the land who could have looked for prospective buyers. ii. Even if JRBS had looked for prospective buyers behind the back of the appellant, it was he, in the light of the agreement, who should have compensated the appellant for breach of agreement and not the buyer (JC). iii. Further JRBS did not make any gain by the deal but instead made a loss of Rs 35,00,000/- for all his so-called secretive efforts, in breach of the 'agreement to sell', finding a prospective buyer. He received a lesser amount for the land fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e different. The appellant in this case has provided service in relation to sale of the land and hence the case laws are distinguished. Revenue has relied upon two Tribunal judgments namely Gauri Ganesha Real Estates [2012 (28) STR] and Prem Steels (P) Ltd [2009(14) STR 748] to state that money retained by the appellants over and above the sale price is in the nature of a commission. Each case is dependent on its own facts and no two set of facts are identical. We find that the facts in the judgments cited by Revenue are not identical to the issues here. However, we have independently also come to the conclusion that the appellant in this case has rendered the service of a 'real estate agent', by facilitating the sale of land. 8.5 Conclusion: In the light of these facts the true meaning of the phrase 'assignment/ nomination fee' for 'causing the sale of land' by JRBS in favour of M/s JC, is the payment of agent fee/ commission to the appellant by the buyer for facilitating the sale of land. The appellant has thus rendered active service in relation to sale of land to JC and is hence covered under the 'real estate agent' service. The whole activity as it unfolds above shows that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, [operational or administrative assistance in any manner], formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation - For the purposes of this clause, the expression "infrastructural support services includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security" As per Section 65(105)(zzzq) of the Finance Act 1994, 'Business Support Service' means: "any service provided or to be provided to any person, by any other person, in relation to support services of business or commerce, in any manner" We find that the appellants activities as stated by them are in the nature of "support services of business or commerce" and are taxable accordingly. No consultancy or advice was rendered. Even during the recording of statement from the appellant on 26/08/2009 the department Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be invoked and no penalty can be imposed. The main plea taken by the appellant against invoking the extended time limit for issue of SCN is that on 26/08/2009 itself a detailed statement was taken from JRBS by Service Tax officials. They too gave all the material information relating to their transactions with very detailed workings and supporting documents to the department on 26.08.2009 itself, hence issue of SCN on 19.4.2012 is an afterthought. It is their contention that the perceived delay in issue of SCN absolves them of a charge of suppression further they cannot be alleged to have suppressed the facts with intention to evade tax. They honestly believed that they were not liable to pay service tax on the basis of the facts of their case. The first issue raised by the appellant is that because the department acquired knowledge of the irregularities the suppression would be obliterated, was examined by the Hon'ble Madras High Court in King Bell Apparels v. Commissioner of Central Excise, Salem [2019 (365) E.L.T. 681 (Mad.)]. The relevant portion is extracted below: "17. Next we move on to the question as to whether the extended period of limitation could have been invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances, there was any fraud or willful misstatement or suppression of facts etc. with intention to evade payment of duty is a question of fact depending upon the facts and circumstances of a particular case. As discussed above suppression with intention to evade payment of duty has been established in this case, hence the appellant is liable to pay the statutory penalty as per section 78 of FA 1994. Having agreed with the appellant as regards duty payment on the other two services are concerned and having found a penalty under section 78 ibid to be proper, we feel that the penalty under section 77 need not be separately imposed. 12.2 We shall now examine the judgements cited by the appellant on the accepted principle that it is neither desirable nor permissible to pick out a word or a sentence from a judgment divorced from the context of the question under consideration and treat it to be complete law. They have relied on the following judgments in their support: i) Kalpana Lamps & Components Ltd. Vs. CCE, Chennai - 2008 (232) ELT 163 (Tri. Chennai) ii) Pahwa Chemicals P. Ltd. Vs. CCE, Delhi in Civil Appeal No. 6392 of 2002 iii) CCE, Pune vs. Telco - 2006 (196 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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