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2019 (9) TMI 792 - AT - Service TaxWorks Contract Service - construction of residential and commercial/non-commercial buildings and complexes - composite works contract - Demand of service tax - Composition scheme - Invocation of Extended period of Limitation - imposition of penalties - HELD THAT:- There is no dispute that in all these cases the appellant not only supplied materials but also rendered services related to the works contract. Therefore, these are all composite works contracts. It is not in dispute that the appellant has not sought or followed the procedure required for composition scheme. Demand of service tax - residential complex services - HELD THAT:- It is well settled legal position that whether the service is rendered as service simpliciter or as a works contract, no service tax can be levied on construction of residential complex prior to 01.7.2010. Learned counsel would submit that for the period post 01.7.2010, they have been discharging service tax appropriately. This is a fact which can be verified to ascertain the full tax liability for the period post 01.7.2010 or otherwise - Matter on remand. Demand of service tax - construction of Mahatma Gandhi Cancer Hospital and Research Institute - HELD THAT:- There are no reason to hold that the activity of a corporate hospital does not amount to commerce or industry. In fact, health care and hospitals is one of the most profitable and fast growing service industries in the country - there are no reason to hold that the construction of hospital building of a corporate hospital is excluded from the definition of works contract service. It is clearly covered by section 65 (105) (zzzza) (ii) (b) as a new building meant for the purpose of commerce or industry - demand upheld. Demand of service tax - construction of administrative building for Indian Registrar of Shipping - HELD THAT:- The Indian Registrar of Shipping is regulatory body who registers ships and vessels in the country and also classifies them and does related activities. These cannot be termed as an act of commerce or industry. Learned departmental representative submits that the IRS charges fees for its activities. Even if it does so it is similar to that of other regulatory agencies such as RT officer, Transport Authority charging fees for issuing a driving license or for registering a vehicle. It is neither an organisation involved in commerce or industry nor does the organisation make any profit - the demand on construction of administrative building for IRS is liable to be dropped. Composition scheme - HELD THAT:- The assessee has the option of paying service tax under the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007, if he chooses to do so. The mere fact that they have not opted for this earlier does not reduce their entitlement to opt for this scheme now - The demand of service tax needs to be recomputed, after following principles of natural justice and giving the assessee an opportunity to present their case including, indicating if they desire to avail the benefit of composition scheme. Interest as applicable will have to be paid on the differential service tax, if any. Imposition of penalties - HELD THAT:- All the demands, with respect to major portion, is already held in favor of the assessee - Of the demand which are upheld, the assessee claims that they have already paid service tax on residential complex services from 01.7.2010 onwards - Penalties set aside. The matter is remanded to the original authority for the limited purpose of calculation of service tax liability and interest as above, after following principles of natural justice - appeal allowed by way of remand.
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