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2024 (3) TMI 349 - AT - Service TaxLevy of service tax - Construction of Complex service for the period 01.04.2006 to 31.05.2007 - Works Contract service for the period 01.06.2007 to 31.03.2011 - Renting of Immovable Property service for the period 01.06.2007 to 31.03.2011 - Management, Maintenance or Repair service during the period 01.04.2006 to 31.03.2011 - Transport of goods by Road service during the period 01.04.2006 to 31.03.2011 - Extended period of limitation - suppression of facts or not - penalties. Construction of complex service for the period 01.04.2006 to 31.05.2007 - HELD THAT:- Construction of complex service is not taxable for the period prior to 01.07.2010 as clarified vide Board Circulars read with amendment in the definition of ‘construction of complex service’ – Sec 65(105)(zzzh) read with Sec 65(91a) of the Finance Act, particularly, Circular No. 108/02/2009-ST dt.29.01.2009. In this Circular, it has been clarified that in spite of agreement of sale entered into between the developer/builder and the prospective buyer, no right accrues to the buyer till the time sale deed for transfer of property is entered or executed - the construction of residential complex, under whichever head i.e., ‘Construction of Complex’ or WCS is taxable only when pursuant to a contract, amount is received by the builder/developer from the intended buyer during construction stage, i.e., prior to grant of completion certificate by the competent authority. In other words, a sale, post construction (after grant of completion certificate) will not come within the scope of service tax. Accordingly, the demand of Rs.2,12,03,687/- is set aside. Works Contract service for the period 01.06.2007 to 31.03.2011 - HELD THAT:- No service tax is payable for the period up to 30.06.2010. So far the demand for the period 01.07.2010 to 31.03.2011 is concerned, the Appellant states that they dispute the reclassification of the same service under the head WCS. However, as per the Notification No. 29/2010 amending the earlier Notification No. 01/2006-ST, keeping in view the value of land also involved, which is being transferred, 75% abatement of the gross value has been prescribed. Accordingly, the Appellant is required to pay service tax on only 25% of the gross value, after abatement. As the effective rate of service tax was 10.3%, thus, 25% of the same works out to 2.575%. The Appellant has already deposited service tax of Rs.1,42,75,289/- Thus, on the gross value relating to this period i.e., Rs.24,88,85,692/-, tax works out to Rs.64,08,807/-. Thus, Appellant has already paid more tax than payable - As the Appellant has already paid the tax in accordance with law for the period 01.07.2010 to 31.03.2011 on the gross value as aforementioned, this ground is allowed and the demand of Rs.8,16,39,119/- set aside. The payment of tax is also supported by the appropriation made from the deposits already made, in the Impugned Order. Renting of Immovable Property - Appellant has urged that they have already paid the admitted service tax of Rs.3,21,680/- prior to the issue of SCN, which has been appropriated - HELD THAT:- The Adjudicating Authority has erred by not considering that the amount of rent, being the gross amount, includes service tax amount also. Evidently, during the relevant period, levy of service tax under this head was highly disputed and had been declared ultra vires by the Hon’ble Delhi High Court in the case of Home Solutions Retail (India) Ltd and Others [2011 (9) TMI 46 - DELHI HIGH COURT]. Thereafter, the said tax was again levied with retrospective effect by re-enacting the provisions. When the amount actually received is considered as gross amount and no other amount is admittedly collected towards service tax, then the gross amount becomes cum-tax value as provided under Sec 67(2) of the Finance Act, 1994. The Adjudicating Authority has erred in not giving cum-tax benefit. If the gross amount is taken as cum-tax value and service tax is calculated on this basis, the amount already paid as tax, tallies - Learned AR has not been able to dispute this contention - the demand in excess of Rs.3,21,680/- set aside. Demand of Rs.3,31,699/- on Goods Transport Agency service - HELD THAT:- As the Appellant has not paid the freight, they are not liable to pay any service tax on the same under Sec 68(2) of the Finance Act read with Rule 2(1)(d)(v) of Service Tax Rules. Some times, in case of business exigency, freight amount has been paid by the Appellant on behalf of the supplier initially, which has been remibursed by the supplier or reduced from the amount of the bill for purchase - Revenue has not disputed the factual aspect in this matter and accordingly, the ground taken is correct and thus, the demand of Rs.3,31,699/- set aside. Extended period of limitation - suppression of facts or not - HELD THAT:- The Appellant is registered with the Department and has maintained proper Books of Accounts, which is evident from the list of relied upon documents in the SCN. Further, there is no allegation of suppression, misdeclaration or other act for evading payment of service tax. Accordingly, extended period of limitation is also not available to the Revenue. Penalties - HELD RHAT:- The issue herein is wholly interpretational in nature and SCN has been issued by way of change of opinion, without finding the ST3 Returns filed to be wrong or erroneous. Accordingly, all penalties imposed are set aside. The impugned order set aside - appeal allowed.
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