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2024 (4) TMI 173 - AT - Service TaxNon-payment of Service tax - commercial rental income under immovable property service (RIPS) - Construction Service (CS) and Commercial Complex Service (CCS) - period from September 2008 to September 2009 - levy of penalty u/s 76 and 77 of FA - HELD THAT:- The Principal Bench of CESTAT in the case of M/S KRISHNA HOMES VERSUS CCE, BHOPAL AND CCE, BHOPAL VERSUS M/S RAJ HOMES [2014 (3) TMI 694 - CESTAT AHMEDABAD] has held the agreements entered into by a builder/promoter/developer with prospective buyers for construction of residential units in a residential complex against payments being made by the prospective buyers in instalments during construction and in terms of which the possession of the residential unit, is to be handed over to the customers on completion of the residential complex and full payment having been made, are to be treated as works contracts, it has to be held that during the period of dispute, there was no intention of the Government to tax the activity in terms of such contracts a builder/developer with prospective customers for construction of residential units in a residential complex. Such works contracts involving transfer of immovable property were brought within the purview of taxable service by adding explanation to Section 65(105)(zzzh) w.e.f. 1.7.2010, and therefore, it has to be held that such contracts were not covered by Section 65(105)(zzzh) during the period prior to 1.7.2010. To tax a particular service, the liability under that head shall only be prospective and not applicable for any period prior to that date, i.e. 01.07.2010 as in the case on hand. Hence, service tax could not be levied under works contract service prior to 01.07.2010; and the levy could only be under CRCS/CCS simplicitor as the case may be. Further, as held by the Hyderabad Bench of the Tribunal in COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, VISAKHAPATNAM - I VERSUS M/S PRAGATI EDIFICE PVT LTD (VICE-VERSA) [2019 (9) TMI 792 - CESTAT HYDERABAD], after 1.6.2007, the chargeability to works contract arises only if it is a composite contract and under construction of complex service if it is a service simplicitor - appeals insofar as with grounds relating to CCS and CRCS are concerned allowed. Penalty under RIPS - HELD THAT:- The issue involved interpretation in as much as, the High Court of Delhi held that there was no liability to service tax insofar as the renting of immovable property was concerned and therefore, an amendment was brought in, to overcome the above judgement. Further, even as on date the issue is pending before Hon'ble Apex Court. Hence, it is a fit case where provisions of Section 80 of the Finance Act, 2012 could be exercised. The penalties imposed on the appellant also cannot sustain - the impugned order set aside - appeal allowed.
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