Tribunal orders pre-deposit for appeal admission in construction dispute. Waives remaining dues on compliance.

The Tribunal ordered the applicant, engaged in constructing residential complexes, to make a pre-deposit of Rs.44,50,000/- within eight weeks for admission of the appeal. Upon this deposit, the pre-deposit of the remaining dues was waived, and recovery stayed during the appeal's pendency. The Tribunal directed compliance with the stay order to be reported by a specific date, as pronounced in open court by Mathew John, J.

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Issues:
- Whether service tax is payable on the sale of undivided portion of land for construction of residential complexRs.
- Whether the demand for service tax is sustainable in a situation involving interpretation of law and invoking the extended periodRs.
- Whether the appeal can be admitted without further predeposit due to substantial time-barred demandRs.

Analysis:

1. The applicant, engaged in constructing residential complexes, sold undivided portions of land to prospective buyers without paying service tax on eight projects from October 2008 to June 2010. The Revenue issued a show-cause notice for recovery of service tax amounting to Rs.1,18,59,227/- along with interest and penalties. The applicant appealed against this order, seeking waiver of pre-deposit for admission of their appeal.

2. The applicant's counsel argued that there was confusion regarding the tax liability in such situations, especially with unclear clarifications from CBEC. They contested the levy during the final hearing and questioned the sustainability of the demand due to the extended period invoked. Additionally, they highlighted a previous show-cause notice for the period 2005-08, invoking the extended period, making the subsequent notice questionable.

3. The counsel further mentioned payments made by the applicant, including Rs.3.44 lakhs already paid and Rs.25,54,907/- for services rendered to landowners. They argued that any tax on services to landowners should be paid upon delivery of flats, which they were doing. The remaining balance to be paid was approximately Rs.89 lakhs. The counsel requested admission of the appeal without additional pre-deposit due to the substantial time-bar on the demand.

4. The Revenue's representative opposed the waiver, pointing out a misrepresentation by the applicant regarding the construction of flats on their own land. Referring to a previous Tribunal decision in LCS City Makers Pvt. Ltd. case, the AR argued for the taxability of services in such situations.

5. After considering arguments from both sides and the LCS City Makers case, the Tribunal ordered a pre-deposit of Rs.44,50,000/- within eight weeks for admission of the appeal. Upon this deposit, the pre-deposit of the remaining dues was waived, and recovery stayed during the appeal's pendency.

6. The Tribunal directed compliance with the stay order to be reported by a specific date, concluding the judgment pronounced in open court by Mathew John, J.

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