https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=767297 https://www.taxtmi.com/caselaws?id=767297 Short payment of service tax - construction of complex service on reverse charge basis - period April, 2017 to June, 2017 - Extended period of limitation - penalty. HELD THAT:- Hon ble High Court in SURESH KUMAR BANSAL ANUJ GOYAL ORS. VERSUS UNION OF INDIA ORS. [ 2016 (6) TMI 192 - DELHI HIGH COURT] has held that there was no statutory mechanism to ascertain the value of service component and that service tax could not be levied on value of undivided share of land. Neither Service Tax (Valuation Rules, 2006) nor Finance Act, 1994 have any provisions for determining value of service covered under Section 65(105)(zzzh) - the aforesaid decision of Hon ble Delhi High Court, even though had been passed in the context of service tax provisions as applicable prior to 01.07.2012, is equally applicable to the period after 01.07.2012. Hon ble Telangana High Court in the case of VASUDHA BOMMIREDDY, HYD ANOTHER VERSUS ASSISTANT COMMISSIONER OF SERVICE TAX, HYD -3- OT [ 2020 (2) TMI 632 - TELANGANA HIGH COURT] ] held as the gross consideration charged by a builder/promoter of a project from a buyer would not only include an element of goods and services but also the value of undivided share of land which would be acquired by the buyer and since neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components from ascertaining the measure of service tax, the same cannot be levied. Thus, the Appellant was not liable for payment of service tax on construction of residential complex service during April, 2017 to June, 2017 and the appeal is liable to be allowed on merits. Extended period of limitation - HELD THAT:- For demanding service tax for the period April, 2017 to June, 2017, SCN had been issued on 05.08.2020, by invoking extended period of limitation. The Commissioner (Appeals) has upheld the invocation of extended period by holding that the decision in the case of Suresh Kumar Bansal was for the period prior to 01.07.2012 and that the Appellant has been holding service tax registration for a long period, they were under legal obligation to file ST-3 Return and pay the service tax. The decision of the Tribunal in the case of M/S SHERVANI INDUSTRIAL SYNDICATE VERSUS CCE, C SERVICE TAX, ALLAHABAD [ 2009 (1) TMI 44 - CESTAT, NEW DELHI] , is applicable to the facts of the present case. In the above case it has been held that extended period of limitation is not invocable when there is scope of difference in interpretation - the demand of Rs.27,83,531/- is liable to be set aside on merits as well as on limitation. Penalties - HELD THAT:- As the demand itself is being set aside, penalties under 78(1) as well as under Section 77(2) are also liable to be set aside. Conclusion - The Appellant was not liable for payment of service tax on construction of residential complex service during April, 2017 to June, 2017 and the appeal is liable to be allowed on merits. The demand of Rs.27,83,531/- is liable to be set aside on merits as well as on limitation. The appeal filed by the Appellant is allowed on merits as well as on limitation. Case-Laws Service Tax Wed, 12 Mar 2025 00:00:00 +0530