Page 79 - GSTL_30th April 2020_Vol 35_Part 5

2020 ] RAJASTHAN STATE MINES & MINERALS LTD. v. COMMR. OF C. EX. & S.T., JAIPUR 565
7. Regarding grant of 51% of equity to the appellant in the JV company,
that cannot be treated as service, as the appellant had not done any promotion,
marketing, sale, etc., for which they were liable to be covered under the BAS. The
appellant further submitted that amount recovered from BLMCL towards the
deputation of employees and officials on actual basis, cannot be treated as ‘ser-
vice’ under the category of BAS.
8. The appellant also pointed out that the demand is barred by limita-
tion as the entire fact was within the knowledge of the Department. It is also a
fact that the money was spent towards the acquisition of land by the JV compa-
ny, however, transfer of land in their name was cancelled by the Government of
India and the activity was therefore considered as surface right by the JV compa-
ny, in their books of account. In such a situation, there was no justification to
treat the amount spent towards the acquisition of land, as consideration for grant
of surface right, with an intention to evade the payment of service tax. The de-
mand thus was not fit to be covered under the extended period of limitation. The
demand raised by the show cause notice dated 19-9-2014, for the impugned peri-
od has been issued beyond the normal period of limitation.
9. As per the direction of the Bench, appellant also submitted written
submissions, which was by and large the repetition of whatever has been stated
hereinabove.
10. Learned Authorised Representative submits that the entire transac-
tion involves three parties i.e. GoR, the appellant (100% owned by the Govern-
ment of Rajasthan), RWPL and BLMCL. Initially, the agreement between the ap-
pellant, RWPL and BLMCL was for the purpose of generation of power through
lignite power plant and for which the land was acquired, but the transfer of title
was subsequently cancelled. The BLMCL treated the amount spent, for grant of
surface right, which is a service to be classified under renting of immovable
property service. As the transfer of surface right was reflected in the books of
account of BLMCL on 30-12-2012, the transaction is required to be taken only
from this date, which is after 1st July, 2012 (after introduction of negative tax re-
gime) and hence taxable. Therefore, the limitation for raising the demand is re-
quired to be reckoned from that date, which is 30-12-2012, demand is well within
the normal period of limitation. It was also impressed upon that the transaction
got completed in September, 2012, when Government of Rajasthan issued a clari-
fication that the title of the land would not be transferred to BLMCL or even the
same cannot be mortgaged for taking loan from financial institution. This activity
got approved on 30-12-2012 in the Board meeting of BLMCL. It is, therefore, his
submission that the entire activity of land acquisition, although initially intended
for sale, has become service by the subsequent cancellation of transfer of land to
the JV company and treating the amount spent towards the grant of surface
right.
11. Learned Authorised Representative submits that the title of land
remained with the JV company. The land has been transferred in the name of
appellant, as evident from balance sheet of BLMCL for year ending 30-3-2012.
Even otherwise the definition of taxable service under the renting of immovable
property does not require the service provider to be owner of the land.
12. Learned Authorised Representative also drawn attention towards
Rule 3 and Rule 5 of POTR, 2011. The point of taxation for this transaction before
1-7-2012, when the renting of vacant land solely used for mining purpose, was

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