Tribunal allows appeal, rejects Service Tax demand. Sports facility construction not taxable. No interest on tax.

The Tribunal allowed the appeal, setting aside the impugned order. It concluded that the appellants did not collect any amount representing Service Tax, thus the demand under Section 73A(2) was not sustainable. Additionally, the construction of the sports facility for the Commonwealth Games was not liable to Service Tax as a commercial construction. Lastly, there was no interest liability on the delayed payment of Service Tax for the construction of independent duplex houses as the tax liability itself was deemed unsustainable.

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Issues Involved:
1. Liability under Section 73A(2) of the Finance Act, 1994 for the amount collected as representing Service Tax.
2. Service Tax liability under Works Contract Service for construction of a practice venue for the Commonwealth Games, 2010.
3. Interest liability for delayed payment of Service Tax on construction of residential complexes in Noida.

Issue-wise Detailed Analysis:

1. Liability under Section 73A(2) of the Finance Act, 1994:
The appellants were engaged in construction activities for IOC and had a contract stipulating that the contract value included all taxes and duties, including Service Tax. The impugned order held that the appellants had to pay Rs. 5,51,33,267/- under Section 73A of the Finance Act, 1994, as they collected this amount representing Service Tax. The appellants argued that they did not collect any amount representing Service Tax from their client and that the confirmation under Section 73A(2) was based on presumption. They submitted evidence through RA bills verified by the recipient, showing no Service Tax was claimed. The Tribunal noted that for liability under Section 73A(2), there must be a factual finding that the person collected an amount as representing Service Tax. The Tribunal referred to previous cases, emphasizing that a clause in the contract indicating inclusion of Service Tax does not automatically imply collection of such tax. The Tribunal concluded that the appellants did not collect any amount representing Service Tax and set aside the demand under Section 73A(2).

2. Service Tax liability under Works Contract Service:
The second issue concerned the construction of a practice venue for the Commonwealth Games at JMI University, New Delhi. The appellants argued that the sports facility developed for the Commonwealth Games could not be considered a commercial construction, as it was intended and used for sports activities. The Tribunal referred to previous decisions, noting that the collection of membership or usage fees does not make a sports facility a commercial building. The Tribunal concluded that the sports facility constructed by the appellants could not be considered a commercial construction liable to Service Tax.

3. Interest liability for delayed payment of Service Tax:
The third issue involved the interest liability of Rs. 6,79,414/- for delayed payment of Service Tax on the construction of residential complexes in Noida. The appellants argued that the construction involved independent duplex houses with no common facilities within the approved layout, and thus should not be taxable under the "construction of residential complex service." The Tribunal noted that common facilities provided by municipal authorities do not constitute common facilities within the approved layout for the purpose of Service Tax liability. Since the appellants had already paid the tax and were not contesting it, the Tribunal concluded that there could be no interest liability on a non-existing tax liability.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, concluding that:
- The demand under Section 73A(2) was not sustainable as the appellants did not collect any amount representing Service Tax.
- The construction of the sports facility for the Commonwealth Games was not liable to Service Tax as a commercial construction.
- There was no interest liability on the delayed payment of Service Tax for the construction of independent duplex houses, as the tax liability itself was not sustainable.

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