2025-VIL-2147-CESTAT-AHM-ST
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SERVICE TAX CESTAT Cases

Service Tax – Transfer of right in immovable property – Receipt of premium – Demand of tax – During audit, department noticed that Appellant had received premium on account of transfer of right in immovable property and commission for supply of Indian raw cotton, but had not paid service tax on same – Department issued show cause notice to Appellant by proposing demand of service tax on premium and commission amount – Assistant Commissioner confirmed demands as proposed in show cause notice – Commissioner (Appeals) upheld order passed by lower authority – Whether Appellant is liable to pay Service Tax on premium income received on account of transfer of right in immovable property – HELD – Agreement to sale/banakhat was entered into between Appellant and Navnitlal. As per condition in said agreement, seller was to obtain permission of Non Agricultural land within 6 months and then only, agreement to sale was to be executed by making payment of saleable price. It is on record that Appellant had received an amount from new purchaser Sri Ravishankar Vidyamandir Trust, but it is not clear if same was received after execution of banakhat. As documents for receipt of permission by seller and execution of banakhat are not before this Tribunal, matter is remitted to Adjudicating Authority to examine relevant aspects with reference to laws/regulations of Gujarat State before deciding service tax liability on premium income received by Appellant. In remand proceedings, Appellant is given liberty to submit documentary evidences before authority – Appeals disposed of - Supply of cotton – Receipt of commission – Tax liability – Whether impugned order confirming demand of Service Tax on commission amount received by Appellant is sustainable – HELD – There is no dispute that Appellant had received commission income from Raja Exports, which they claim to be exempt on ground that said commission income is on account of sale of Indian Raw Cotton which was further exported to Bangladesh. In support of their claim, Appellant produced copy of debit letters addressed to Raja Exports. Said debit letters were not found sufficient by lower authorities to support claim of Appellant in absence of any agreement between Appellant and Raja Exports. While arguing their case before this bench, Appellant could not produce any other documents in support of receipt of commission from sale of Indian raw cotton. Impugned order passed by Commissioner (Appeals) is uphold to extent of confirming service tax demand on commission amount received by Appellant.
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