JUDGMENT

Parth Prateem Sahu, J. - This appeal under Section 35-G of the Central Excise Act, 1944 (hereinafter referred to as 'the Act of 1944') has been preferred by appellant-M/s. Chhattisgarh Steel Castings (P) Ltd. against the finding recorded by Adjudicating Authority and confirmed by Appellate Authorities i.e. Commissioner (AppealsII) Customs, Central Excise and Service Tax and Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'CESTAT') questioning the saddling with liability of payment of service tax with interest and further imposition of penalty of equal amount of tax under Sections 77 and 78 of the Finance Act, 1994 (hereinafter referred to as 'the Act of 1994').

2. Appellant-M/S. Chhattisgarh Steel Castings (P) Ltd. is having service tax registration No.ST/JML-/332/CSCPL/ GTA/2005 as appellant being liable to pay service tax on 'Transportation of Goods by Road' as goods transport agency being recipient of service and also registered under the category of 'Business Auxiliary Service' as provider of service. The main business of appellant was of steel casting and other collateral smelting industries.

3. During the course of audit of the accounts of appellantnoticee, it revealed that income shown in balance sheet for the year 2006-07 under the head of 'income' of Rs.2,67,98,881/- and similarly for the year 2005-06 under the head of 'other income', it has been shown as Rs.2,87,72,791/-. In the balance sheet under the head of 'other income' during the year 2006-07, they have also shown income of Rs.1,84,86,132/- and during the year 2005-06, Rs.2,50,00,000/-. On query being made by the Authority, it was informed that the 'other income' for the year 2006-07 amounting to Rs.1,62,81,450/- has been generated from the sale of agricultural plot. The area of the agricultural plot appearing in the documents i.e. sale agreement and registered deed of sale has been shown to be 0.405 hectare or 43560 sq.ft. of land situated at village Jora, Teshil and District Raipur. With reference to aforementioned transaction, appellant produced the document of sale i.e. sale deed, which shows that one of the Directors, namely, Shri Deepak Agrawal entered into an agreement for purchase of land from one Hukum Chand Jain on non-judicial stamp paper dated 24/07/2006. The total consideration has been agreed between the parties was of Rs.32,00,000/-, out of which, Rs.1,00,000/- has been given in advance and balance amount is to be paid before the Registrar at the time of execution of sale deed. Subsequently, on 02/02/2007, the said agricultural plot has been sold to Raipur Entertainment World Pvt. Ltd. called "Assignee" and got the sale deed executed in favour of Assignee on consideration of Rs.1,93,81,450/-, out of which, Rs.1,61,81,450/- was received by the appellant. The sale deed was executed on 15/02/2007.

4. Similarly, during the year 2005-06, appellant shown income of Rs.2,50,00,000/- in the balance sheet as 'other income' and during the course of enquiry, it revealed that said income is also with respect to transactions relating to immovable property of 22.58 acres at village Chorhata in District Rewa (M.P.). The agreement of said property was singed on 01/04/2004 between the owner of M/s. Ken Electricals and M/s. Chhattisgarh Steel Castings (P) Ltd. for a total consideration of Rs.2,76,25,625/-. The validity period of agreement was for two years. The terms of agreement allows the appellant to get the sale deed executed by owner in favour of someone else directly. Pursuant to this, on 05/04/2004, the sale deed was executed in favour of M/s. Hariyog Builders (P) Ltd. Rewa for a total consideration of Rs.5,26,25,625/-, out of which, Rs.2,76,25,625/- was paid to M/s. Ken Electricals and M/s. Chhattisgarh Steel Castings (P) Ltd. and difference amount of Rs.2,50,00,000/- has been transferred to the appellant.

5. From the aforementioned information gathered during the course of auditing of books of account of appellant a s