TMI Blog2014 (2) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... o made land available and not to a totally independent party cannot be accepted. Service tax payable on the owners share of the residential complex – Revenue was of the view that the sale value of land was an artificial value recognized by the State authorities for the purpose of registration and was not the real value of the land - Construction undertaken for the land owner involves service rendered by the assesse to the land owner – relying upon LCS City Makers Pvt. Ltd. Vs CST, Chennai [2012 (6) TMI 363 - CESTAT, CHENNAI ]. Part of the service to the land owners were received in the form of land prior to 01-06-2007 follows – the contention that they started receiving consideration for the service only after 01-06-2007 does not app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prayer, it is ordered that the cause title in the appeal may be changed to read as Commissioner of Service Tax Chennai so that in all future proceedings he will be a party. 2. The applicant-appellant is engaged in the business of providing commercial and industrial construction service and also construction of residential complex service. In respect of two projects executed by the applicant during the period May 2006 to March 2008, Revenue conducted certain investigations and entertained a view that applicant has not paid the tax liability which should have been paid by them. Therefore, a show cause notice dt. 23.3.2009 was issued for recovery of such tax short paid which has been adjudicated resulting in confirmation of service tax dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e project only from 01-06-2007 and by that time entry under section 65 (105) (zzzza) had come into force and the they had option to pay tax under the new scheme. 4.2 The Ld. AR for Revenue submits that entry under section 65 (105) (zzzza) of the Works Contract (Composition scheme for Payment of Service tax) Rules, 2007 makes it clear that the scheme was not applicable for on-going projects when the Rules were notified. So, it is contested that they could not have opted for levy under the new entry and they should have paid tax as applicable under construction of commercial or industrial construction service only. He relies on the Hon ble Supreme Court s judgement in the case of Nagarjuna Construction Co. Ltd. Vs GOI reported in 2012 (28) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand arises on owner s share, it will also be under composition scheme as the consideration payable by the owner only when sale price of the owners share of land transferred to the developer was realized. (iii) At any rate, the applicant should be given abatement of 67% on the gross value as per Notification No.1/06-ST dt.1.3.06. (iv) The Counsel has also contested that the demand is time barred since the entire activity was known to the Department because they were paying tax under works contract scheme and filing returns. 4.5 The Ld AR argues that the value of the land shown in the agreement is an artificial value taken for the purpose of registration of land as per guidance value notified by State authorities and is far short of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments or transferring the land to the applicant. The argument of Revenue is that the value of service provided should be assessed comparing the value of services in respect of the residential flats constructed by the developer for the other parties in the same complex. According to Revenue, the sale value of land is an artificial value recognized by the State authorities for the purpose of registration and is not the real value of the land. This is a case where the land is given to the developer and the developer paid back by providing services of construction along with materials used for such construction activity. Since it is a case of barter of land for goods and services, it is only proper that value is determined with reference to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done for a party who made land available and not to a totally independent party. (b) Once the above prima facie conclusion is reached, the other prima facie conclusion that consideration for part of the service at least that to the land owners were received in the form of land prior to 01-06-2007 follows. So the argument that the applicant started receiving consideration for the service only after 01-06-2007 does not appear to be correct. If liability accrued prior to 01-06-07, the appellant may not be eligible to scheme notified from 01-06-2007. Of course, we note that the relevant rules talks of option prior to payment of service tax. But the moot question is whether a person who did not promptly pay tax can be put on a more advantageo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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