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2019 (9) TMI 793 - AT - Service TaxConstruction services - construction of residential complexes - Landowners portion of Construction of Complex Services - Renting of Immovable Property - Management, Maintenance or Repair Services - demand of service tax alongwith interest - imposition of penalties as well. Construction of residential complexes - Landowners portion of Construction of Complex Services - HELD THAT:- The established legal position is that ‘Works Contract Service’ can be charged as ‘works contracts’ only under Section 65 (105) (zzzza) and only with effect from 1.6.2007. In the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI [2018 (9) TMI 1149 - CESTAT CHENNAI], the question which arose was whether a demand can be made on ‘commercial and industrial construction service’ under Section 65 (105) (zzzh) of the Finance Act, 1994 after 1.6.2007 where the nature of contract is a composite contract involving both supply of materials and rendition of services. It has been held that “ For the period post 1.6.2007, service tax liability under the category of ‘commercial or industrial construction service’ under Section 65 (105) (zzzh), ‘Construction of complex service’ under Section 65 (105(zzzq) will continue to be attracted only if the activities are in the nature of services simpliciter. Thus, if the services rendered are in the nature of composite works contracts, they cannot be charged to service tax prior to 1.6.2007 and can be charged post this date only under this head 65 (105) (zzzza) and not under any other head. Thus, as far as service tax, under ‘construction of complex service’ in respect of residential complexes is concerned, prior to 1.7.2010 (when the explanation was inserted), no tax could be levied. This was also clarified by the CBEC in circular No. 108/2/2009-ST dated 29.1.2009 - thus, with respect to construction of complex services were rendered prior to 01.7.2010, no service tax is chargeable and the demand to this extent needs to be set aside. Renting of Immovable Property Service - the relevant period is 2007-08 to 2009-10 and the SCN was issued on 22.10.2010 invoking extended period of limitation - HELD THAT:- Renting of immovable property per se was not taxable prior to 08.5.2010 but only services rendered in relation to renting of immovable property. After the amendment, renting itself became taxable with retrospective effect from 01.6.2007 itself. When the law itself did not cover taxation of renting of immovable property services, it is inconceivable that the assessee could have anticipated the retrospective amendment and paid service tax accordingly. Failure to pay service tax in this manner cannot be alleged to be fraud or collusion or wilful misstatement or suppression of facts with intent to evade payment of service tax - the demand on this head is not sustainable beyond the normal period of limitation. Management, maintenance or repair services - HELD THAT:- This demand was made based on the information available in the books of accounts of the appellant themselves and their ledgers which show the amounts as having been received from management services. The audited balance sheets of the appellant themselves show that they have earned income on maintenance and repair services. They cannot now claim that the income is not so - Learned counsel for the appellant tried to impress upon the bench that the income is actually income from interest etc. However, from the papers presented before us, he could not establish that the income which was recorded in their audited balance sheets as maintenance and repair services was not so and in fact, it has been misdeclared by their auditor and it pertains to interest income. It is also not in dispute that the appellants have neither declared these amounts as services rendered by them nor have they paid service tax nor have they filed their ST-3 returns with these amounts - the demand under the head management, maintenance and repair services invoking extended period of limitation is sustainable. Extended period of limitation - Interest - penalty - HELD THAT:- Extended period is invokable in the case of management, maintenance and repair services and is irrelevant in respect of the construction of residential complex services and construction of complex services as the same has been held to be not taxable at all - As far as renting of immovable property is concerned, the extended period of limitation, cannot be invoked - Consequently, the amount on interest, if any, is payable and the penalties under Section 77 & 78 also need to be upheld. Appeal is remanded to the original authority for the limited purpose of re-computation of liability - appeal allowed by way of remand.
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