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TMI Blog2018 (5) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... with prospective buyers of the flats of his area at the rate of Rs. 5,495/- per sq.ft; appellant, on the basis of audit objection, was issued a show cause notice dated 06.02.2017 for payment of differential service tax for the period April 2012 to March 2015 with an allegation that they had not discharged the service tax liability towards the amount received from land owners towards allotted share of developed property. The allegations in the show cause notice also invoked the extended period of limitation and the said show cause notice relied upon the clarification given by the Board dated 10.02.2012 wherein the service tax liability has been vested on the builders/developers on the construction service involved in flats/houses given to land owners as per the agreement. The demand was issued on the basis of nearest sale value of the villas to the new prospective customers of the 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 Rs. 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith rule 3(a) of the Service Tax (Determination of value) Rules, 2006 and as clarified by the Board vide circular dated 10.02.2012 and the value that should be adopted for discharging the service tax liability on the land owners share of Villas is to be arrived as per the price received by them from independent prospective customers. It is his submission that the payment of tax for the said project is not in tune with the circulars issued in Board's circular dated 10.02.2012 and that they have not effectively countered the findings of the adjudicating authority. 5. We have considered the submissions made at length and perused the records as also the Board circulars and instructions in this regard. We find that in the present case, Revenue has demanded service tax from appellant on the ground that it was not paid correctly on the villas which were constructed by appellant 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the value of the villas sold to prospective customers and appropriate service tax liability has been discharged the same value, it cannot be again made liable to service tax under the premise that sale value of the villas given to land owners is a consideration on which service tax liability was not discharged. It would be imperative to reproduce the provisions of Section 67 of the Finance Act, 1994 which would apply in the case in hand, as also rule 3 of the Service Tax (Determination of the Value) Rules, 2006. "24. For the purpose of analyzing the valuation aspect of the impugned transactions, the following relevant legal provisions are considered: 67. Valuation of taxable services for charging Service Tax- (1) Subject to the provisions of this chapter, service tax chargeable on any taxable service with reference to its value shall,- (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration received by them and in such a case there is no reason to again demand service tax on the villas constructed and handed over to the land owners. 9. The Chartered Accountant certificate has clearly stated that to arrive at the value of construction, areas of villas to be shared to land owners, the Developer (the appellant herein) had undertaken an exercise to determine the value of construction per sq.ft for the villas and the said construction value of the villas built up area which was shared free of cost to the land owner, was considered while arriving at the service tax liability. We find that the annexure to the said certificate talks about the financial arrangements which we have explained herein above. The said Chartered Accountant certificate and the annexure thereto are reproduced: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustomers has been made. This leads to conclusion that 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 the same amount again would amount to double taxation. 13. The reliance placed by Ld. DR on the case of LCS City Makers Pvt. Ltd. will also not carry the case of Revenue any further, as in that Bench upheld the contention of the Revenue that recording that "the facts and circumstances of the case do not warrant assessment of a different value for services in respect of flats sold to individual 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 di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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