2013 (12) TMI 1435 - AT - Service Tax

Appellate Tribunal Amends Cause Title, Upholds Tax Liability, and Orders Deposit

Chitra Constructions Pvt. Ltd. Versus Commissioner of Service Tax, Chennai

The Appellate Tribunal allowed the Revenue's application for changing the cause title in the appeal, directing the respondent's name to be amended. ... Stay application - Demand of service tax - Construction of residential complex - Acitivity done by own labor - Held that:- Board’s clarification is about a person owning land who is constructing residential complex, using labour engaged by him because in such a situation there is no separate service provider and service receiver. If the person having land engages the services of another contractor for getting the complex constructed the contractor provides service of construction of residential complex to the land owner. In this case, the land is registered in the name of prospective buyers of residential units and thereafter the complex is constructed. So there is a service provided to the land owners by the applicant and the position is legally clear and made clear in the circular referred to by the applicant - Following decision of LCS City Makers Pvt. Ltd. Vs CST Chennai [2012 (6) TMI 363 - CESTAT, CHENNAI] - Prima facie case not in favour of assessee - Stay granted partly. Issues:1. Change of cause title in the appeal.2. Service tax liability for construction of residential complex.3. Financial difficulty faced by the appellant.Analysis:1. The first issue pertains to the change of cause title in the appeal. The Appellate Tribunal allowed the Revenue's application for the change, directing that the respondent's name in the cause title should be read as Commissioner of Service Tax, Chennai instead of Commissioner of Central Excise, Chennai-IV in all future proceedings.2. The second issue involves the service tax liability for the construction of a residential complex by the appellant. The appellant argued that they did not pay service tax for the construction during a specific period as they employed their own labor, citing a Board's circular. However, the Revenue contended that in cases where the land is registered in the name of prospective buyers and the complex is constructed thereafter, a service is provided to the landowners by the appellant. The Tribunal referred to a similar case and decided in favor of the Revenue, finding a prima facie tax liability on the appellant.3. The third issue addresses the financial difficulty faced by the appellant. The appellant claimed serious financial challenges due to losses incurred in the previous year and the absence of ongoing projects. Despite paying a sum towards their liability, the Tribunal directed the appellant to make a further deposit within a specified period and stay the collection of the balance dues during the appeal's pendency, considering the financial hardship pleaded by the appellant.In conclusion, the judgment addressed the issues of cause title change, service tax liability for construction activities, and the appellant's financial difficulties, providing detailed reasoning and directives for each aspect based on legal interpretations and factual circumstances presented during the proceedings.