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2018 (7) TMI 1797 - AT - Service TaxResidential Complex Service - Renting of Immovable Property Service - Construction of residential units - the appellant undertook construction of residential units and received consideration for the same - appellant also constructed shops which were leased to successful bidders in the auction process. Such lease was for a period of 99 years and various amounts were recovered - demand of service tax on both the above services - time limitation - penalty. Construction of Complex Service - activity undertaken by RHB includes the development of land and construction of residential units on the land made available by the Rajasthan Government - demand contested on the ground that they have undertaken construction of independent houses/ residential units and not of any complex with more than twelve such units - Held that:- From a few photographs enclosed with appeal, it is noted that RHB has undertaken construction of row houses. Each house shares a wall with the houses on either side and perhaps with the one in front / behind. For the activity to be covered by the definition of residential complex, it should comprise of more than twelve residential units. These should be situated within one building or more than one building. Further, the requirement is that these residential units should have common area and also water supply/ affluent treatment system and other common facilities such as park, lift, common parking space etc. All these facilities should be located within a premises and the layout of such premises should be approved by an authority under any law for the time being in force - From the findings recorded by the Adjudicating Authority, it does not appear that he has examined the situation in terms of satisfying the condition specified in the definition in respect of each and every cluster of houses constructed by RHB and for which demand of service tax has been made - the matter remanded to the Adjudicating Authority for re-examination and denovo decision. Renting of Immovable Property - The RHB has constructed various commercial buildings/ shops which have been allotted on the basis of auction on a 99 years Perpetual Lease. From such allottees, various amounts were recovered by RHB as lease charges - demand of service tax on such lease charges - Held that:- RHB will be liable for payment of service tax on the lease amounts recovered by them from the allottee of commercial properties and shops by whatever name. But no service tax levied can be upheld in respect of such lease amounts recovered for allotment of residential units - reliance placed in the case of Greater Noida Industrial Development Authority vs. CCE&ST, Noida [2014 (9) TMI 306 - CESTAT NEW DELHI] - demand upheld. Time limitation - RHB is an instrumentality of the State Government - no suppression of facts - Held that:- The appellant entertained a bonafide belief that such lease of commercial property/ shops may not be liable for payment of service tax under the category of “Renting of Immovable Property” - the Department is not justified in invoking the extended period of time limit for demanding the tax - demand for normal period upheld. Penalties - Held that:- The appellant is an instrumentality of Rajasthan Government and performing statutory functions in accordance with the Rajasthan Housing Board Act and they were under the bonafide belief that the activity would not attract service tax, this is a fit case to waive penalty in terms of Section 80 of the Finance Act, 1994 - penalty set aside. Part matter on remand, partly decided in favor and partly against assessee.
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