Construction, rent and freight tax demands fail where receipts are recomputed as cum-tax and no suppression is shown.

Construction of complex service was treated as non-taxable for the period before 01.07.2010, and tax arose only on amounts received during construction before completion certificate; after recomputation excluding completed-project receipts and amounts of another entity, the tax already paid was sufficient, so the construction and reclassified works contract demands did not survive. Rent received for immovable property was treated as cum-tax value, requiring recalculation, and the amount deposited covered the liability. Freight under goods transport agency service was not fastened on the assessee on the facts shown. In the absence of suppression or misdeclaration, the extended period and penalties were not available.

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Issues: (i) Whether service tax was payable on construction of complex / works contract service for the disputed period, including the effect of completion certificate and the applicable abatements. (ii) Whether the demand for renting of immovable property was sustainable after granting cum-tax benefit. (iii) Whether the demand on goods transport agency service was payable by the assessee. (iv) Whether the extended period of limitation and penalties were invocable.

Issue (i): Whether service tax was payable on construction of complex / works contract service for the disputed period, including the effect of completion certificate and the applicable abatements.

Analysis: Construction of complex service was held not taxable for the period prior to 01.07.2010 in view of the contemporaneous clarification and the statutory explanation inserted with effect from that date. Tax liability arose only where amounts were received during the construction stage before grant of the completion certificate. For the later period, the gross value had to be recomputed after excluding amounts relating to completed projects and amounts belonging to another group entity. On the corrected turnover, the tax already paid exceeded the amount payable, and even on a composition basis the payment was sufficient.

Conclusion: The demand under construction of complex service and the reclassified works contract service demand were not sustainable.

Issue (ii): Whether the demand for renting of immovable property was sustainable after granting cum-tax benefit.

Analysis: The amount realised towards rent was treated as gross receipt. Since no separate service tax was collected, the receipt had to be treated as cum-tax value and tax recalculated accordingly. On that basis, the amount already deposited matched the tax liability.

Conclusion: The demand on renting of immovable property was unsustainable to the extent it exceeded the tax already paid.

Issue (iii): Whether the demand on goods transport agency service was payable by the assessee.

Analysis: The purchase orders showed that freight formed part of the supply arrangement and the assessee was not the person liable to pay freight in the statutory sense. The factual basis for shifting tax liability on the assessee was not disputed.

Conclusion: The demand on goods transport agency service was not sustainable.

Issue (iv): Whether the extended period of limitation and penalties were invocable.

Analysis: The assessee was registered, maintained books of account, and the dispute was interpretational. There was no substantiated allegation of suppression, misdeclaration, or evasion. The notice was effectively founded on a change of opinion, so the extended period could not be invoked and penalties could not survive.

Conclusion: The extended period of limitation and all penalties were not invocable.

Final Conclusion: The appeal succeeded in full and the impugned order was set aside with consequential relief.

Ratio Decidendi: Service tax cannot be sustained where the taxable event is absent or the receipt is shown to be cum-tax value, and the extended period and penalties are unavailable in a bona fide interpretational dispute without suppression or misdeclaration.

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