TMI Blog2021 (6) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... rt. Advance maintenance charges - Club membership charges - HELD THAT:- It is categorically stated that they can establish before the adjudicating authority about the utilization of the said charges collected for the purpose mentioned in the respective agreement entered with the purchasers as per Maharashtra Ownership of Flats Act, 1963. Prima facie, we find force in the contention of the learned C.A. for the appellant. Therefore, to examine the evidences claimed to have been placed earlier and that would be placed as and when asked by the adjudicating authority to establish the fact of utilization of other charges as per the Act, the matter needs to be remanded to the adjudicating authority for scrutiny of the evidences. Amount received on account of cancellation of booking - period October, 2010 to March, 2012 - HELD THAT:- The learned Commissioner has travelled beyond the scope of allegations labeled in the show-cause notice. There is merit in the contention of the learned AR for the Revenue. The point raised by the appellant in their reply to the show-cause notice that the amended definition of 66E(e) is not applicable to the facts of the present case, since the deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Hon'ble Supreme Court. Referring to the judgment of Hon'ble Delhi High Court in the case of Suresh Kumar Bansal Vs. Union of India 2010-TIOL-1077-HC-DEL-ST, he has submitted that since under the Service Tax Rules there is no provision to determine the quantum of services rendered from the total amount of value paid to the service provider, which includes the amount paid for materials/ goods used in the construction of premises, hence, the levy of tax on residential complex has been set aside by the Hon'ble Delhi High Court. It is his contention that the Department has filed appeal against the judgment of Hon'ble Delhi High Court before the Hon'ble Supreme Court. Further, he has submitted that the appeal against the judgment of the Hon'ble Bombay High Court has been referred to a Nine Member Bench of the Hon'ble Supreme Court and the judgment is awaited. He submits that this Tribunal taking note of the pendency of the constitutional issue before the Nine Member Bench of the Hon'ble Supreme Court in the case of M/s Kalptaru Ltd. Vs. Commissioner of Service Tax-IV, Mumbai vide Order No. A/87615-87618/2019 dated 07.05.2019 remanded the matter to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be provided and the same is taxable under the category of construction of residential complex. Also, the learned Commissioner had wrongly observed that the cancellation of booking is misnomer and income is actually towards the service of construction services rendered by the appellant. The learned C.A. has vehemently argued that the said observation of the learned Commissioner is beyond the scope of the show-cause notice, as the Balance- Sheet of the appellant company refers to the said amount as cancellation of booking only and not on account of rendering of construction service. He has further submitted that no penalty is imposable nor interest is recoverable as the Service Tax itself cannot be confirmed against them. 4. The learned AR for the Revenue reiterates the findings of the learned Commissioner. On the issue of levy of Service Tax on construction of residential complex service, the learned AR for the Revenue has submitted that the Hon'ble Bombay High Court has upheld the constitutional validity of the said levy and even though the appeal was filed against the said judgment and pending before the Hon'ble Supreme Court, however, no stay has been granted. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision on merit on the basis of outcome of the judgment to be delivered by Nine Member Bench of the Hon'ble Apex Court. 8. As far as the issue relating to applicability of Service Tax on other charges, which includes Township Corpus Fund, Advance Maintenance charges, charges relating to Electric Meter Legal and Club Membership charges etc., the principle has been settled by the Hon'ble Bombay High Court in the case of Shri Krishna Chaitanya Enterprises case (supra). Their Lordships observed as follows: - 26 . The arguments of the Revenue fail to take note of this backdrop and in which it terms the obligations and duties under the MOFA to be rendering of taxable service. The definition in the Finance Act, pure and simple, alone has been looked at for the purpose of advancing this argument. The backdrop in which the promoter comes on the scene is totally lost sight of and that is precisely noted by the Tribunal. It is wellsettled that in India there is dual ownership. The land beneath the building does not belong to the person who constructs or owns the building. In most of the cases, the builders and developers obtain rights from the land owners so as to enable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are often complaints and cases of unscrupulous builders and developers fleecing and cheating Flat purchasers. Therefore, a complete mechanism till conveying of the property is put in place. Prior thereto, it is the promoter who must form the legal entity, namely, a co-operative housing society or a company. It is towards that end that he has to hold on to the property and the money for complete discharge of his eventual duty and function. Until that stage is reached, he has to maintain, safeguard and protect the property. He has to look after the day-to-day wear and tear. Therefore, when he maintains the structure or repairs it, he is not rendering a taxable service in the sense envisaged by the Financial Act, 1994. If one looses complete focus or sight of the backdrop in which the so called service is rendered, then, the conclusion as erroneous and suggested by the Revenue will be reached. 27 . The deposit or the monies themselves are held and appropriated towards payment of taxes, etc., popularly known as outgoings. The building and the Flats therein has to stand intact till all the Flats or units are sold and the statutory obligations are fully discharged. This is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue arises before us, we do not think that a taxable service is rendered. The Revenue does not wish to take into consideration the background in which buildings are maintained and till they are conveyed with complete title to even the land beneath. Thus, the provisions of Sections 5 and 6 and eventually the further provisions right upto Section 13 of the MOFA would make it clear that builder and developer maintains and repairs the property till it is conveyed or the title in the same is conveyed to the Flat purchasers or the legal entity which would ultimately be formed by him. Thus, a co-operative housing society or a company would have to be formed of all those Flat purchasers who have purchased the Flats prior to or under construction, namely, subsequently purchased Flats. The completion of the building or it being rendered fit for occupation is one of the duties and obligation of the builder and promoter under this law. For them to be conveyed he has to maintain the property. His liability is in terms of the statute itself. It is towards that end that money is collected and paid over to the statutory authorities in the form of charges and taxes as it is the builder s obligat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h before the adjudicating authority about the utilization of the said charges collected for the purpose mentioned in the respective agreement entered with the purchasers as per Maharashtra Ownership of Flats Act, 1963. Prima facie, we find force in the contention of the learned C.A. for the appellant. Therefore, to examine the evidences claimed to have been placed earlier and that would be placed as and when asked by the adjudicating authority to establish the fact of utilization of other charges as per the Act, the matter needs to be remanded to the adjudicating authority for scrutiny of the evidences. 9. On the issue of applicability of Service Tax on cancellation of booking, it is claim of the appellant that the allegation in the show-cause notice as well as confirmation of the demand in the impugned order proceeded in a wrong direction inasmuch as the definition of taxable service in relation to construction of complex provided under Section 65(105) of the Finance Act, 1994 in existence prior to 1.7.2012 was not considered but the learned Commissioner while confirming the demand adopted the definition of taxable service laid down under the amended Section 66E(e) of the Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
