Appeal dismissed for failure to refund advances and file returns, penalty upheld under section 78.

The appeal challenging the Order-in-Appeal confirming a demand of Rs.10,68,657/- along with penalty for 'Construction of Residential Complex Services' was dismissed. The Tribunal upheld the demand and penalty under section 78, finding that the appellant failed to provide evidence of refunding advances and had not filed ST3 returns during the relevant period. The appellant's argument that the demand for the extended period was time-barred was rejected, as the Tribunal deemed the appellant to have willfully suppressed material facts to evade service tax. The impugned order confirming the demand and penalty was upheld in the judgment pronounced on 17/08/2023.

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Issues involved:
The appeal challenges the Order-in-Appeal confirming a demand of Rs.10,68,657/- along with penalty, pertaining to the provision of 'Construction of Residential Complex Services' by the Appellant.

Summary:
The appellant, engaged in providing 'Construction of Residential Complex Services', was issued a show cause notice for demanding service tax. The Adjudicating Authority ordered recovery of service tax with penalties imposed. On appeal, the demand was reduced to Rs.10,68,657/- along with penalty under section 78. The appellant contended that the demand was not sustainable as allottees had stopped payments and requested cancellations, rendering the exercise revenue neutral. They argued that the demand for the extended period was hit by limitation, as transactions were duly recorded and known to the revenue. The appellant cited legal precedents to support their arguments.

The Authorized Representative for the Department contended that the appellant willfully suppressed material facts to evade service tax, justifying the extended period.

The Tribunal found no dispute that the appellant provided taxable services and collected advances from customers. The appellant claimed to have returned the advances, but failed to provide evidence. The Tribunal rejected the appellant's contention. The Tribunal also dismissed the appellant's argument that the demand for the extended period was hit by limitation, noting that the appellant failed to provide evidence of refunding advances and had not filed ST3 returns during the relevant period. The Tribunal upheld the impugned order, dismissing the appeal.

In the judgment pronounced on 17/08/2023, the appeal was dismissed, and the impugned order confirming the demand and penalty was upheld.

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