TMI Blog2013 (11) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... . The fact that individual residential units were for residential use of the purchaser of UDS cannot take the complex outside the definition. Any interpretation to the contrary will make the entry otiose. Adjudicating authority has not extended abatement as per the Notification No. 1/06-ST towards the value of the materials used in the construction activity which the applicant is prima facie eligible for. Since the demand is based on information unearthed during investigation and not voluntarily disclosed, we are prima facie not in agreement with the argument that the demand is time barred - Assessee directed to make a pre deposit - Stay granted partly. - ST/396, 397/2012 - Misc. Order Nos. 41758-41759/2013 - Dated:- 21-6-2013 - SHRI. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994. So Revenue issued two show cause notices covering periods 16th June 2005 to 31st March, 2009 and 1st April, 2009 to 30th June, 2010, demanding service tax not paid. On adjudication demand for service tax of Rs.7,10,19,261/- and Rs. 12,83,912/- stand confirmed against the applicant for the respective periods along with interest and penalties. Aggrieved by the order, the applicant has filed two appeals before this Tribunal along with stay applications for waiver of pre-deposit of dues arrived from the impugned orders. Such petitions are being considered in this proceeding. 3. The main argument of the Ld. Counsel for the applicant is that when the construction activity was done the land was still in the name of the applicant and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther points out that the adjudicating authority has not given abatement as per the Notification No. 1/06-ST towards the value of the materials used in the construction activity. And if such abatement is given, the demand will come down to 33% of the demand confirmed by the adjudicating authority. 8. The Ld. Counsel also pleads that there was no suppression of facts on the part of the applicant and hence the demand confirmed invoking extended period is not maintainable. He further submits that the applicant is facing financial difficulties for making pre-deposit on account of the general slump in the construction industry. 9. In reply to the query from the Bench, it is clarified that after completion of the construction activity, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on the value of construction services. While the evasion of stamp duty is not a matter before the Tribunal he argues that the essence of the agreement should be appreciated taking the total facts into consideration in which case it can be seen that there is an agreement to construct flat and there is no agreement to sell constructed flats. 10. With regard to the argument of the applicant that these flats were for individual use of each of the buyers in the residential units and hence not covered by the definition at section 65 (91a), the Ld. AR submits that the definition under Section 65 (91a) excludes only those cases where the entire residential complex is for the personal use of the person getting the building constructed for his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the applicant should be put to reasonable terms for hearing them, especially because service tax assessees like the present applicant have hardly any assets and if a liability is confirmed at a later point of time department will not be able to recover any dues. 14. Considered the arguments by both sides. We are of the view that there is a relationship of service provider and service recipient between the applicant and the prospective buyers of the individual residential units as it is evidenced by the contract between the two parties. The contract is not for sale of flats but for providing construction service. 15. We have also examined the exclusion clause in section 65(91a) which reads as under: (91a) residential complex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rary will make the entry otiose. 17. The Circulars of CBEC and the decision in the case Magus Construction are in the context of builders who construct flats and then sell the flats. In this case there is sale of only UDS and no sale of constructed flats. Further there are agreements by applicant for providing service. So we are prima facie of the view that the facts of these cases are quite different and the rationale in the said instructions and decision will not apply to the facts of the case. 18. However, we note that the adjudicating authority has not extended abatement as per the Notification No. 1/06-ST towards the value of the materials used in the construction activity which the applicant is prima facie eligible for. Since the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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