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BCC Developers And Promoters Pvt. Ltd. Versus CST, Delhi

2018 (2) TMI 835 - CESTAT NEW DELHI

Demand - Collection in the name of service tax - Construction activity - works contract service - revenue contented that the terms of the contract clearly stipulate that Service Tax is included in the consideration - invocation of Section 73A (2) of FA - Held that: - the appellant did establish that they have not collected any amount in any manner representing Service Tax. The existence of clause in the contract to the effect that it will include Service Tax by itself will not give any inference .....

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sports activities. This is not disputed - collection of fee and charges for use of the stadium does not make the stadium as a commercial building - the sports facility constructed by the appellant cannot be considered as a commercial construction liable to Service Tax. - Demand of interest - construction of independent duplex houses - Held that: - having already collected and paid the tax, the appellants are not disputing on merit - Since the Tax liability may not stand there can be no ques .....

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e, Delhi-I. The brief facts of the case are that the appellants are engaged in construction activities. They have entered into an agreement with M/s IOC for construction of expansion project of Panipat Refinery Township mainly consisting of residential units. In pursuance of said contract, the appellants executed civil construction work for IOC. Similarly, in pursuance of a contract with Jamia Milia Islamia University, New Delhi the appellant constructed a practice venue for Common Wealth Games, .....

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e. Various penalties were also imposed. There is also a third issue regarding liability of the appellant for an interest amount of ₹ 6,79,414/- for delayed payment of Service Tax on construction of residential complexes in Noida. 2. The Ld. Counsel appearing for the appellant contested all the three issues. He submitted on the following lines. a. The appellant entered into an agreement with IOC for expansion project of township of Panipat. The contract stipulated as a standard clause that .....

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ed order under Section 73A (2) is purely on presumption. The legal position is that they have not represented and collected any money in any manner representing Service Tax and there can be no liability under Section 73A at all. b. He further submitted that they regularly raised RA bills during the course of the execution of the said contract. Each one of the bill is verified by the recipient for accounts and payment. The check list clearly records that no Service Tax was claimed by the contract .....

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on Wealth Games, the venue/stadium is intended and used only for sports activities. Collection of some membership fee or usage fee by itself will not make the constructed stadium as a commercial building. He referred to certain decided cases in similar set of facts, to support his submissions. d. Regarding interest demand he submitted that they have already discharged Service Tax, which is in any case not liable for payment. The construction by them is 30 number of independent duplex houses at N .....

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bility under the said tax entry. The municipal authorities of Noida providing water supply does not make the existence of common facility within the approved layout. However, they are not contesting the already paid tax. Since the tax itself is not payable, the interest question for delay will not arise. 3. The Ld. AR strongly contested the submission of the appellant. He submitted mainly on the following lines. a. The provision of Section 72 A (2) readwith Section 73 A (6) makes it very clear t .....

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n by the appellant he submitted that the present contract did not specify that Service Tax, if any . In other words, taxes payable including Service Tax is stipulated in the contract giving a clear indication that Service Tax amount is very much part and parcel of the consideration collected by the appellant from the client. 4. We have heard both the sides and perused the case records. On the first issue we have examined the provision of Section 73A:- 73A (1). Any person who is liable to pay ser .....

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e collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (2)and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice .....

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tion (4) shall be adjusted against the service tax payable by the person on finalization of assessment or any other proceeding for determination of service tax relating to the taxable service referred to in subsection (1). (6) Where any surplus amount is left after the adjustment under sub-section (5), such amount shall either be credited to the Consumer Welfare Fund referred to in section 12C of the Central Excise Act, 1944 or, as the case may be, refunded to the person who has borne the incide .....

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e plain reading of the sub-section (2) of Section 73 A makes it clear that any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing Service Tax, such person shall forthwith pay the amount so collected to the credit of Central Government. The question now for decision is whether or not the appellant collected any amount representing Service Tax. While we note that the Service Tax can be collected in any manner but it shou .....

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collected, from any other person, in any manner, as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. On a true and fair construction of this provision, the legislative intent is clear. The conditions precedent for ordering any person to remit (an amount collected as service tax, which is not required to be so collected), is a finding of fact that the person had in fact collected an amount towards service tax even though n .....

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73A(2) read with sub-section (4) thereof. Sub- section (4) specifically enjoins that an order should be passed under this provision only after considering the representation, if any, made by the person on whom the notice is served under sub-section (3) and to determine the amount due from such person, not being in excess of the amount specified in the notice. Subsection (3) of Section 73(A) requires a notice to be issued to show cause why the amount, as specified in the notice, in respect of a l .....

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f Section 46 (2). Section 46 (2) of Bombay Sales Tax Act, 1959 prohibited any person collecting any amount of tax in certain cases. The dispute was whether some surcharge collected by the dealer while selling the goods can be construed as a sales tax to attract the prohibition. The ratio is that the amount which is collected from the client should be relatable or referred to or identified as Service Tax in a manner where both parties will understand unambiguously that the said amount is nothing .....

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the Ld. AR emphasized that it is for the appellant to establish categorically they did not collect any amount representing Service Tax. We note that the appellant did establish that they have not collected any amount in any manner representing Service Tax. The existence of clause in the contract to the effect that it will include Service Tax by itself will not give any inference that such Service Tax has been collected from the client. The checklist for RA bills makes it clear that the recipient .....

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ter there is no case of the department that excisable goods have come into existence at the hand of the appellant and that such duties were leviable and therefore, they should have been taken to have been provided for when the lump sum price was quoted. Further the Tribunal in Himatsingka Seide Ltd. V.s CC, Bangalore [2005 (191) ELT 885 (Tri.-Bang.)] held as below:- In the present case also, the sale price, no doubt, includes all statutory levies payable. That means, after some time the seller s .....

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ed order we are of the considered view that the provisions of Section 73A has no application to the facts of the present case. Accordingly, the demand in terms of Section 73A (2) will not survive. 10. On the second issue we note that the practice venue for the Common Wealth Games cannot be considered as a commercial building. The said stadium or facility is mainly used for sports activities. This is not disputed. The impugned order held against the appellant only on the ground that fee/ charges .....

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ity as commercial or industrial construction. Accordingly, the tax liability was held non-sustainable. In the present case also we find that the sports facility constructed by the appellant cannot be considered as a commercial construction liable to Service Tax. 11. On the third issue regarding interest liability of the appellant on the Service Tax liability with reference to construction of independent duplex houses, we note that the appellants have a strong case on merit. However, as noted ear .....

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