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PJ/CASE LAW/2014-15/2538

Whether premium collected by Housing Board leviable to service tax?

Case:-MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION Vs COMMISSIONER OF SERVICE TAX, MUMBAI
 
Citation:-2015-TIOL-139-CESTAT-MUM
 
Brief Facts:-Vide stay Order No. S/942/14/CSTB/C-I dated 25/08/2014, the appellant, M/s. Maharashtra Industrial Development Corporation, was directed to make a pre-deposit of Rs.185 crore, which is the service tax demand for the normal period of limitation within a period of 12 weeks and report compliance by 25/11/2014.

The appellant has filed a miscellaneous application for modification of the stay order.

Appellant contentions:- The learned Consultant appearing for the appellant submits that subsequent to the passing of the stay order by this Tribunal, there has been further developments in the matter. The issue of exigibility to service tax, of the premium collected in a transaction where the land is leased for the purpose of subsequent commercial construction has been considered by the Principal Bench of this Tribunal at New Delhi, in the case of Greater Noida Industrial Development Authority.Vide order dated 28/08/2014,the Principal Bench has held that salami premium collected is not exigible to service tax under the category of "renting of immovable property".
The learned Counsel also submits that an identical matter also came up before the Hon'ble High Court in the case of City and Industrial Development Corporation of Maharashtra Ltd., (CIDCO Ltd.) in Central Excise Appeal (L) No. 317 of 2014 wherein also this Tribunal had ordered for pre-deposit of the service tax demand for the normal period of limitation for consideration of the appeal. The Hon'ble High Court of Bombay has directed this Tribunal to hear the appeal without insisting on a pre-deposit by setting aside the order by this Tribunal. The learned Consultant submits that the ratio of the above decisions may be followed in the present case also and therefore, the stay order dated 25/08/2014 be modified suitably waiving the requirement of pre-deposit.

Respondent Contentions:- The learned Deputy Commissioner (AR) appearing for the Revenue has no objection.

Reasoning of Judgment:- Considering the final order passed by Principal Bench at Delhi in the case of Greater Noida Industrial Development Authority and also the order of the Hon'ble High Court of Bombay in the case of City & Industrial Development Corporation of Maharashtra Ltd., the stay order dated 25/08/2014 was modified by waiving the requirement of pre-deposit of Rs.185 crore and the registry was directed to list the appeal for final hearing without insisting on any pre-deposit. Revenue is restrained from recovery of dues adjudged against the appellant during the pendency of the appeal.
 
Thus, the application for modification is allowed as discussed above.
 
Decision:- Modification application allowed.
 
 
Comment:- The analogy of the decision is that the salami premium collected by MIDC is not leviable to service tax under the category of ‘Renting of immovable property’  in view of the decision given in the case of Greater Noida Industrial Development Authority and City & Industrial Development Corporation of Maharashtra Ltd.

Prepared By:Meet Jain
 

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