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2015 (11) TMI 219 - CESTAT BANGALORE

2015 (11) TMI 219 - CESTAT BANGALORE - 2015 (40) S.T.R. 815 (Tri. - Bang.) - Construction of Residential Complex Service - whether the appellant is liable to pay service tax in respect of the complex built for ITC - Invocation of extended period of limitation - Held that:- From the definition it is quite clear that if the complex is constructed by a person directly engaging any other person for design or planning or layout and such complex is intended for personal use as per the definition, serv .....

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he property is used for personal use then such activity would not be subject to service tax. It is quite clear that CBE&C also has clarified that in cases like this, service tax need not be paid by the builder/developer who has constructed the complex. If the builder/developer constructs the complex himself, there would be no liability of service tax at all. Further in this case it was different totally, the appellant, has engaged sub-contractors and therefore rightly all the sub-contractors hav .....

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t and also if that view is applicable to the facts of this case before us, we cannot find fault with the appellant for entertaining such a belief that they are not liable to pay tax. Since the entire demand is beyond the normal period of limitation, the appellants succeed on the ground of limitation also. - Decided in favour of assessee. - ST/1854/2010-DB -Final Order No. 21332 / 2015 - Dated:- 16-7-2015 - Mrs. Archana Wadhwa, Judicial Member And Mr. B.s.v. Murthy, Technical Member Mr. N. Anand, .....

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l agreement dated 30.03.2007. With the consent of ITC as per the supplemental agreement dated 30.03.2007, the appellant sub-contracted the construction work to M/s. L&T, ECC Division and other sub-contractors. M/s. L&T, ECC Division received a part of the contracted amount directly from M/s. ITC as sub contractors. There were other sub-contractors also namely Tech Services, Stone Workers, Schneider Electric India Pvt. Ltd. and all the sub-contractors have discharged the service tax liabi .....

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to March 2008 with interest. Penalties under Sections 76, 77 & 78 of Finance Act 1994 have also been imposed. 2. It was submitted by the learned counsel on behalf of the appellant that appellants entertained a bonafide belief that they were not liable to pay service tax at all; they had written a letter to the CBE&C on 30.10.2008 and had sought clarification. However CBE&C replied to them that concerned Commissioner would reply. He submits that this shows that appellant entertained a .....

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ad paid the tax on the amount received by them. 3. He also relies upon the CBEC Circular issued on 29.01.2009 and 24.05.2010 to submit that even the CBEC has taken a view that in cases like this no tax is liable to be paid. 4. He also relies on the decision in the case of Khurana Engineering Ltd. Vs. CCE, Ahmedabad [2011 (21) S.T.R. 115 (Tri.-Ahmd.)] to submit that in this case the residential complex was meant for personal use of ITC as per the definition of Personal Use in the definition of .....

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M/s. ITC Ltd. and therefore ITC cannot be considered as the one who has received the service but it is the appellant who has received the service. Therefore he submits that the tax was liable to be paid by the appellant. 7. We have considered the submissions made by both the sides. The relevant definitions during the relevant period are as under: Section 65(30a) Construction of complex means- (a) construction of a new residential complex or a part thereof; or (b) completion and finishing servi .....

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than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of su .....

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r M/s. ITC Ltd. and appellant was the main contractor. Appellant had appointed sub-contractors all of whom have paid the tax as required under the law. The question that arises is whether the appellant is liable to pay service tax in respect of the complex built for ITC. From the definition it is quite clear that if the complex is constructed by a person directly engaging any other person for design or planning or layout and such complex is intended for personal use as per the definition, servic .....

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s relavant. Para 3 of this circular which is relevant is reproduced below: 3. As per the information provided in your letter and during discussions, the Ministry of Urban Development (GOI) has directly engaged the NBCC for constructing residential complex for Central Government officers. Further, the residential complexes so built are intended for the personal use of the GOI which includes promoting the use of complex as residence by other persons (i.e. the Government officers or the Ministers). .....

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