TaxTMI 
TaxTMI 
2020 (10) TMI 1065
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....ment to construct a house/flat on behalf of the customers; constructs/gets it constructed from his sub-contractors; collects the amount from his customers; as such cannot be treated as developer who sells flats/houses on their own and that the said services are taxable services defined under section 65(105)(zzzh) of the Finance Act, 1994 w.e.f. 07.06.2005 and the Appellant is liable to pay service tax of Rs. 6,79,14,900 during the period 16.06.2005 to September 2007. A show cause Notice, dated April 19, 2011, demanding duty as above along with interest, invoking extended period and proposing to impose penalties under Section 76 and Section 78 of the Finance Act 1994 read with Rule 15 (4) of the Cenvat Credit Rules, 2004, was issued to the appellants and was confirmed vide order 15/2012 date 30/31.01.2012 passed by the Commissioner of Service Tax. Hence, the appellants are before us with the appeal ST/1093/2012. 2. Shri Ramesh Chander Kumar, learned Advocate for the appellants submits that only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and only then the ownership of the property gets tran....
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....h the Adjudicating Authority has held that the service provided by the developer in the case of such tripartite agreement is liable to service tax placing reliance on the Honourable Apex Court judgement in the case of M/s. K. Raheja Development Corporation Vs State of Karnataka, 2006 (3) STR 337 (SC), it is submitted that the decision was rendered while clarifying the scope of the definition of 'works contract' based upon the provisions of the Karnataka Sales Tax Act, 1957. He submits that it would tantamount to making a new case against the Appellant even for the period after 01.06.2007; the proposal that the Appellant is covered under works contract service was never raised in the SCN; adjudicating/ appellate authority can not traverse beyond SCN. He relies on the following. (i). Reckitt & Colman of India Ltd Vs CCE 1996 (88) ELT 641 (SC). (ii). Hindustan Polymers Co Ltd Vs CCE, Guntur, 1999 (106) ELT 12 (SC) (iii). Fuji Film India Pvt Ltd Vs CC (Import), Nhava Sheva, 2017 (349) ELT 203 (SC). (iv). CCCE, Surat V Sun Pharmaceuticals Industries Ltd 2015(326)ELT3 (SC). (v). CC, Mumbai Vs Toyo Engineering Ind....
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....amount is wholly untenable; Notification No.1/2006 does not specify that the appellant is not entitled to the cenvat credit of input services availed prior to 01.03.2006; Notification No.15/2004 only barred the availment of the credit of duty paid on inputs or capital goods; it did not take away the right of the appellant to avail the credit of duty paid on input services under the provisions of the Cenvat Credit Rules, 2004; the restriction in taking cenvat credit of service tax on input services has commenced only from 01.03.2006; from this date onwards the appellant is barred from taking cenvat credit of service tax on input services; cenvat credit, availed, on input services under the provisions of Rule 3(1) of the Cenvat Credit Rules, 2004 till 28.02.2006 does not lapse; the appellant is permitted by Rule 4 of the Cenvat Credit Rules, 2004 to utilize such cenvat credit; Rule (4)(e) allows the appellant to utilize the cenvat credit so taken for payment of service tax on any output service. He relies upon (i). Shapoorji Pallonji & Co Ltd Vs CCE, Pune-I, 2016(41) STR 532 (Tri-Mumbai). (ii). Shapoorji Pallonji & Co Ltd Vs CCE, ....
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.... provision of services, is justified denying the benefit of notification 1/2006 -ST dated 01.03.2006 claimed, on the ground that Cenvat credit was availed under Notification 15/2004 dated 10.09.2004, in the month of March 2006? (ii). whether the Appellant is a service provider rendering services of "construction of residential complexes", in terms of Section 65 (30) (a) of the Finance Act, 1994 read with Section 65 (105) (zzzh)ibid and as to whether, the demand of Service Tax of Rs. 6,79,14,900 for the period from 16.06.2005 to 30.09.2007 against the appellants is tenable? (iii). whether the show cause Notice is time barred? 7. Regarding the availability of exemption contained in notification No.01/2006 dated 01.03.2006 to the appellant, learned Commissioner finds that the contention of the appellant is not correct because the Notification No.15/2004 dated 10.09.2004 automatically gets nullified after the introduction of notification No.01/2006 dated 01.03.2006; therefore the question of availment of notification no.15/2004 and notification no 01/2006 for the month of March 2006 does not arise; even though the cenvat credit pertain....
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....itled for the cenvat credit of input services prior to 1-3-2006. 7.2. In view of the above, we find that the issue is no longer res integra; there is no provision under Notifications 1/2006 or 15/2004 that such credit legally availed prior to 1.3.2006, under the provisions of CCR,2004, would lapse. Therefore, the appellants are eligible to utilise the cenvat credit, availed by them, on inputs/input services, prior to 1.3.2006. we find that to that extent demand is not sustainable. 8. Coming to the second issue of demand of Service Tax, in terms of Section 65 (30) (a) of the Finance Act, 1994 read with Section 65 (105) (zzzh), for the period from 16.06.2005 to 30.09.2007, learned commissioner finds that the tripartite agreement is executed between the owner of land, the service provider for sale/canvass and apartment purchaser; main activity mentioned in the agreement is to develop the building and the job is assigned to the service provider; as such the role of service provider is constructing or providing the service of a contractor, the owner has taken the services of service provider as contractor; the ownership of the land is not transf....
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....vice elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. .... 43. We need only state that in view of our finding that the said Finance Act lays down no charge or machinery to levy and assess service tax on indivisible composite works contracts, such argument must fail. This is also for the simple reason that there is no subterfuge in entering into composite works contracts containing elements both of transfer of property in goods as well as labour and services. 44. We have been informed by counsel for the revenue that several exemption notifications have been granted qua service tax "levied" by the 1994 Finance Act. We may only state that whichever judgments which are in appeal before us and have referred to and dealt with such notifications will have to be disregarded. Since the levy itself of service tax has been found to be non-existent, no question of any exemption would arise. With these observations, these appeals are disposed of." 10. The Tribunal h....