TMI Blog2018 (4) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... s engaged in the Construction of Residential and Commercial C omplexes as well as development of Residential and Industrial Townships. The appellant developed two townships in Jaipur namely Manglam Aangan Villas and Manglam Arpan Villas consisting of individual villas duly approved by the Jaipur Development Authority in terms of Rajasthan Township Policy, 2010. The DGCEI investigated an intelligence against the appellant indicating that they have not discharged their Service Tax liability properly. The intelligence further revealed that they were not paying Service Tax on the two villa s projects at Jaipur. After conclusion of investigation and issue of show cause notice dated 12/10/2015 the impugned order was passed in which demand for Service Tax was upheld on various grounds. The issues involved in the present case along with the amounts of Service Tax demanded are summarized below for ready reference: - S. No. Issue Period Service Tax/Credit (Rs.) 1. Non-payment of Service Tax on construction of individual villas in two projects, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 (43) STR 3 (Delhi). The Hon ble High Court observed that the contract between the buyer and builder in the development and sale of complex is a composite one and not for procurement of Service Simplicitor. Such contract involves not only elements of services but also transfer of goods and also immovable property. In the absence of any machinery provisions in the Act or Rules to ascertain the service element in such composite contract, the Hon ble High Court has held that levy of Service Tax on CCS is ultra vires. Since the contract of the appellant is also of similar nature, he argued that, no Service Tax is leviable on the appellant f or the period up to 30/06/2012. ii. From 01/07/2012, Construction of Complex has been included in the list of declared services under Section 66 E (b) of the Finance Act, 1994. Since there is no machinery provision in the Act or Rules even for the period from 01/07/2012, the decision of the Hon ble Court in Suresh Kumar Bansal (supra) will continue to be applicable and levy of Service Tax on composite contracts cannot be sustained even for the period subsequent to 01/07/2012. iii. The activities carried out by the appellant involved su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act). Even in cases where payments were received after that date since the taxable event for Service Tax is the date of re n de ring of service and not the date of receipt of payment. In this connection he relied on the following case laws. Reliance Industries Ltd Vs Commissioner, 2008 (10) STR 243 (Tri - Ahmd) Commissioner v. Reliance Industries Ltd, 2010 (19) STR 807 (Guj) Vistar Construction (P) Limited v. Union of India, 2013 (31) STR 129 (Del) vii. The appellant is not liable to pay Service Tax on electricity and transformer charges. The Department has demanded Service Tax for such amounts under the category of Preferential Location Services, defined in Section 65 (105) (zzzzu). The Service Tax already stands paid under the category of Construction S ervices after claiming abatement. viii. The appellant is also not liable to pay Services Tax on club charges under the category of Club or Association Services . In this connection he relied on the following cases: - Sports Club of Gujarat Ltd. v Union of India, 2013 (31) STR 645 (Guj) Ranchi Club Ltd v. Chief Commissioner, 2012 (26) STR 401 (Jhar) ix. The appellant is also not l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nition of the above service, an Explanation has been inserted W.E.F 1-7-2010 which expands the scope of the Section and the provides for charging Service Tax. A legal fiction has been created whereby the set of activities carried out by the builder are deemed to be service provided by the builder to the buyer. But the said Explanation has covered only those activities and consideration received by the builder before the grant of Completion Certificate by the proper Authority. The argument s advanced on behalf of the appellant are on two fronts. The legal argument advanced is that the levy of Service Tax in the category of Construction of Complex Services has been held as ultra vires by the Hon ble Delhi High Court in the case of Suresh Kumar V/s Union of India (supra.) T h e Hon ble High Court has observed as below: - 49. Whilst the impugned explanation expands the scope of Section 65(105) (zzzh) of the Act, it does not provide any machinery for excluding the non - service components from the taxable services covered therein. The Rules also do not contain any provisions relating to determination of the value of services involved in the service covered under Section 65(105) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a few other services such as PLC Services, club services, work contract service (reverse charge). 12. After carefully considering all the arguments advanced as well as the record of the case, we are of the view the whole case requires reconsideration by the Original Authority. It is necessary to examine, with reference to the factual details, whether the Residential Complex having individual villas is in fact having common areas as mentioned in the statutory definition. It is further required to be decided whether the activity carried out would be covered within the Construction of Complex Service or under the category of Works Contract Service. It is also required to examine the whole issue with reference to law laid down by the Hon ble Supreme Court in the case of Larsen and Toubro (supra) as well as by the Hon ble Delhi High Court in the case of Suresh Kumar Bansal (Supra). 13. In view of above observations, we set aside the impugned order and remand the matter to the Adjudicating Authority for passing de novo orders in the light of the observations above. All issues are kept open. He will no doubt extend a fair opportunity of hearing before passing order in de novo p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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