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TMI Blog2024 (12) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... text, it is noted that the Ld Counsel has submitted that it was a preliminary understanding between the two parties, prior to entering into a contract - the appellant has not submitted any other evidence before this Tribunal to substantiate the veracity of the said MoU. Further, it is noted that there is a percentage of the purchase consideration which is paid as fee to the appellant, which in the impugned order has been held to be in the nature of consideration for the taxable service provided by them - it is found appropriate to remand this matter to the original authority to examine the contentions of the appellant, regarding revenue recognition and adjustment from advances received for projects. Advances received against Projects, viz., Advances received for sale of plot - HELD THAT:- The impugned order has taken note of the documents submitted by the appellant during the course of hearing. It has been noted that the appellant has submitted documents only for ₹ 36,41,336/- and could not produce the documents for the remaining amount. In this context, appellant has submitted the indication of service tax/Sales tax in the agreement is not evidence that service tax has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment of various projects and sold the plots and shops therein. The appellant followed the practice of receiving advances against the sale of plots and shops in the projects which were developed. The appellant also took loans to meet the financial requirements to buy land during the period in dispute. The appellant received advances from parties to meet financial needs of the business. An enquiry was initiated by the Anti-Evasion wing of Service tax Commissionerate, Delhi vide letter dated 21 August 2014 on the basis of information that the Appellant was rendering taxable services and had got registered themselves in the year 2013 and have not paid any service tax prior to 19.09.2013. On completion of investigations, show cause notice dated 13.12.2016 was issued to the appellant proposing recovery of service tax, which was adjudicated vide order dated 31.01.2018 wherein the Commissioner confirmed the demand of service tax of Rs. 86,90,088/- out of the total demand of Rs. 2,16,74,956/- along with interest and penalties for the period 2011-12 to 2014-15. Being aggrieved by the impugned order, the appellant has filed the present appeal. 3. Learned Chartered Accountant for the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice without clarity as to which revenue/advances/receipts are classified under which category of taxable service. Moreover, even vide the impugned order, no classification has been given by Adjudicating Authority while confirming demand for the period prior to 01 July 2012. It has been alleged in the Show cause notice that services of the appellant are covered under Construction services other than Residential Complex, including commercial/industrial buildings or civil structures and/or 'Works Contract Services' while definition of both the category of services is given in the show cause notice respectively. Thus, even after conducting visit on the premises of the appellant under Rule 5A of Service Tax Rules, 2004, the Department has failed to bifurcate and classify as to which activity/revenue falls under Business Auxiliary Services and which activities/revenue falls under Repair, reconditioning, restoration or decoration or any other similar services of any motor vehicle. In this regard, the Ld. chartered accountant relied upon the following decisions:- CCE v. Brindavan Beverages Private limited [2007 (213) ELT 487 (SC)] Shubham Electricals v. Commissioner of C. Ex. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the following decisions:- Commissioner of Central Excise, Chennai vs. MEL Systems Services Limited [2008 (232) ELT 69 (Tri.-Chennai)] Collector of Central Excise, Ahmedabad vs. Vikshara Trading and Invest. P. Limited [2003(157) ELT 4 (S.C.)] 3.3 Ld. CA further submitted that the Adjudicating Authority has wrongly interpreted the clause 6.7 of Sale Deed which provides that Service tax/Sales tax or any other taxes imposed/levied by the Government shall be borne and paid by the buyer as the purpose of said clause was merely to seek Service tax/sales tax over above the sale consideration, in case the levy of the same is attracted. Presence of such a clause in any agreement does not necessitate that Service tax levy is attracted or collected by the appellant. Further, if Appellant did not receive any consideration from its buyers prior to receipt of completion certificate, no service tax levy gets attracted. 3.4 Further, the Ld. CA submitted that it has been wrongly contended in Impugned OIO that appellant did not argue about 'Other Advances' as shown, and stated that said amount of Rs. 4,80,16,419/- had been received from AGIL as a financial arrangement involving no servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23 (4) TMI 216-DELHI HIGH COURT] Learned Chartered Accountant contended stating that cum-duty benefit under Section 67(2) of the Act must be granted to the appellant, if any, demand is upheld. 4. Learned Authorized Representative for the Department submitted that the appellant had received advances from M/s Aerens Goldsouk International Ltd. (AGIL) to acquire land in the rural agricultural areas. They also submitted copy of Memorandum of understanding (MOU) entered into with AGIL, wherein it was agreed that AGIL would provide interest free advances to the appellant to purchase such land. This MOU was not registered with the appropriate authority, in the absence of which the MOU has no legal validity. Learned Authorized Representative further submitted that the MOU is required to be signed by all the parties at each page alongwith the witness. In the instant case, the MOU was not signed by both the parties, nor any witness had signed on it. No amount had been indicated in the MOU which was given to the appellant by AGIL on account of purchase of land. The MOU was executed on 01.04.2010, but, the validity period of MOU had not been mentioned. Thus, MOU could not be a legally valid do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocumentary evidence, benefit of exemption cannot be given to appellant as was claimed by them on account of transaction made with AGIL and advances received for sale of plots, projects properties etc. The appellant had intentionally not submitted all the documentary evidences in order to conceal the actual nature of the activities carried out by them. 4.3 Learned Authorized Representative further submitted that the extended period as provided in proviso to Section 73(1) of the Act ibid has rightly been invoked in this case and no portion of the demand is beyond a period of five years from the relevant date for show cause notice. 5. We have heard the Ld Chartered Accountant for the appellant and the Ld AR for the Department. The issues before us for consideration are as follows:- (i) Interest free advances received against property (ii) Advances received against Projects, viz., Advances received for sale of plot 6. We take up the first issue for consideration. In this context, the Ld Counsel submitted that these were in the nature of advances received to acquire land in rural areas and a copy of the MoU was also submitted to the adjudicating authority. The impugned order has taken n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bilities All information regarding payment and finance is indicated in clear terms Dispute resolution and allocation of risks should be mentioned. Clauses regarding termination of the said MoU 6.2 In the instant case, it has been observed in the impugned order that the MoU is not registered with any competent authority. However, it has been noted that the said MoU does not have any signature and date. This is required as both the parties have to understand and accept the duties responsibilities cast on the First Second party as per the clauses in each page of the MoU. The termination date has also not been mentioned, due to which also MOU cannot be accepted as a legal document/arrangement between two parties. There is no mention of payment of any amount as advance to the appellant. In this context, we note that the Ld Counsel has submitted that it was a preliminary understanding between the two parties, prior to entering into a contract. However, we note that no such contract has been produced before this Tribunal to negate the findings of the adjudicating authority. In addition, we note that the impugned order has taken note of clause 5 of the said MoU wherein the appellant is to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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