TMI Blog2018 (5) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... nt charged i.e. to say consideration received from land owners in kind and consideration received from prospective customers i.e. total gross amount. In the case in hand, the amount attributable to the consideration received by appellant in the form of land rights from the land owner stands included in the value of villas sold to prospective customer which would mean that whatever consideration was received by the appellant in form of developmental right was considered in assessable value. CBEC vide circular dated 16.02.2006 in respect of collection of service tax under construction of complex services had issued instructions under section 57 (B) of Central Excise Act, 1944 which are made applicable to service tax under section 83 of Finance Act, 1994 - it was held that the gross amount charged by the builder is liable to tax - it is evident that appellant has complied the service tax liability on the construction undertaken on joint development basis on the value of construction which is mandated in Section 67 of Finance Act, 1994, read with rules made thereunder. In our view, if once the service tax liability has been discharged on the gross amount, demand of service tax on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he property which lies with the appellant. The appellant contested the show cause notice on limitation as well as on merits, taking the stand that the value of ₹ 5,495/- per sq. Ft in respect of the land owner share is incorrect as the entire value of the land was considered by them while discharging the service tax liability in terms of Section 67 (1)(iii) of Finance Act, 1994 read with Rule 3(a) of Service Tax (Determination of value) Rules, 2006 and claim the benefit of abatement as per various notifications. The adjudicating authority, after due process of law, confirmed the demands raised alongwith interest and imposed penalties. 3. Ld. Counsel Shri Alok Barthwal appeared alongwith Shri Ch. Nageswara Rao, Consultant for the appellant. It is his submission that demand has been wrongly confirmed; that at the time of sale of Villas to prospective customers, appellant had included the cost of land in the price of villas and paid service tax on such sale price as provided in the statute; that in consideration of the land given by the land owners they constructed villas for land owner and gave them free of cost; that the service tax due on the consideration received from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant for land owner, as a part of compliance of the agreement entered with the land owners. We find that adjudicating authority has confirmed the demands holding that transactions between builder and land owner and builder and buyers have to be understood as two separate transactions. It is undisputed that appellant has provided construction services to the land owner and as a consideration, received legal rights on his share of land, constructed Villas on that land and sold them, which would mean that appellant is investing the consideration received from first transaction of land owners right to construct in second transaction. In our view, merely because the consideration received from land owners is invested in construction of villas to other buyers on which service tax is paid, it cannot be concluded that service tax paid on consideration received from land owners has to be evaluated differently. 6. There is no dispute as to the following facts: a) Appellant and land owners entered into joint development agreement under which appellant has to construct villas on the land owned by land owner and sale the same to prospective customers on which service tax liability is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll,- (i) In a case where the provision of service is for a consideration in money,be the gross amount charged by the service provider for such service provided or to be provided by him; (ii) In a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money, with the addition of service tax charged, is equivalent to the consideration; (iii) In a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged. (3) The gross amount charged for the taxable service shall include any amount received towards the taxable service before, during or after provision of such service. (4) Subject to the provisions of sub-sections (1), (2) and (3), the value shall be determined in such manner as may be prescribed under Rule 3 of Service Tax (Determinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. The adjudicating authority, in the impugned order, had relied upon Board Circular No. 151/2/2012-ST, dt. 10.02.2012 to arrive at the value in the case of flats given to land owners to be determined based upon the value of the villas sold to prospective customers seems to be inappropriate reasoning and when the cost for acquisition of land has already been considered for discharge of service tax of an amount received from prospective customers, taxing the same under the laws of service tax liability for the consideration received for the services to land owners, seems to be incorrect, as also on the case of LCS City Makers Pvt. Ltd. [2013(30) STR 33 (Tri.-Chennai)]. 11. We find that CBEC vide circular dated 16.02.2006 in respect of collection of service tax under construction of complex services had issued instructions under section 57 (B) of Central Excise Act, 1944 which are made applicable to service tax under section 83 of Finance Act, 1994, in para No. 8 of the said instructions stated as under: 8. It is noticed that in the construction business different practices and financial arrangements concerning (a) promoters, developers builders, (b) land owners (c) con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dividual buyers as compared to flat handedover to the land owners ; and recorded that the flats which were allotted to land owners were sold by land owners. In the case in hand, the facts are different. 14. In respect of the arguments put forth on limitation, we do find that in the situation wherein the interpretation of the provisions of Section 67 and the rules were involved and there could be different interpretation. It is undisputed that appellant had declared the value received from prospective customers in their returns and discharged the service tax liability thereon, which include the value of consideration paid in kind towards the land, there cannot be any allegation that there was a deliberate intention on the part of the appellant as to non-payment of differential service tax liability. In our view, in the peculiar facts and circumstances of this case, it cannot be held that there was a malafide intention on the part of the appellant to suppress any facts or make mis-statements, with an intention to evade service tax liability. Accordingly, we hold that demands are also hit by limitation and extended period cannot be invoked for the demands received. 15. In the li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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