MERCURY ESTATES Vs. COMMISSIONER OF SERVICE TAX, DELHI

JUDGEMENT

(1.) This appeal by M/s. Mercury Estates, under Section 35G of the Central Excises Act, 1944 ('Act') is directed against the impugned order dated 31st March, 2015 [2015 (40) S.T.R. 507 (Tri. - Del.)] passed by the Customs, Excise & Service Tax Appellate Tribunal ('CESTAT') in the stay application filed by the Appellant in its appeal being Appeal No. ST/51507/2015-CU (DB) which in turn is directed against the order-in-original dated 29th November, 2013 passed by the Adjudicating Authority ('AA'), viz., the Commissioner of Service Tax ('CST'). The brief facts as stated by the Appellant are that according to Sahara India Commercial Corporation Ltd. (SICCL) was keen to set up residential townships in or around Allahabad (in Uttar Pradesh) and Jodhpur (in Rajasthan). At each of the locations SICCL required around 100 to 150 acres of land. SICCL entered into Memoranda of Understanding (MOUs) with M/s. Sahara India (SI) which in turn entered into two separate MOUs dated 20th June, 2006 and 20th August, 2003 respectively for purchase of land in Allahabad and Jodhpur. The MOUs specified the extent of land to be purchased and the rate of land per acre at which SI would purchase land at each of the cities. The Appellant was entitled to difference, if any, of the amount actually paid for purchase of land to the original owners of land and the "agreed rate" between the Appellant and SI. In other words, the Appellant was entitled to the profit/loss on account of purchase and sale of the land.

(2.) A show cause notice ('SCN') dated 22nd October, 2010 was issued to the Appellant by the Directorate General of Central Excise Intelligence. The SCN narrated the fact of the above MOUs having been entered into between SI and the Appellant and set out in a tabular form the details of the sums received by the Appellant and the consequent transactions of purchase of land as under:

(3.) The case of the Appellant has been that while it made a profit as regards the purchase of land at Jodhpur, the sum of Rs. 4 crores received by it for the purchase of land at Allahabad was not utilised to purchase land and that the said amount was returned by way of transfer of shares of 2 group companies of the Appellant in favour of SICCL.