TaxTMI 
TaxTMI 
2022 (3) TMI 9
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....ual partywise sales ledger against the sale deeds submitted by them being 39 in number. They also submitted their price list for various categories of apartment like villas, plots, luxury condominiums & duplex apartments. 2. Thereafter, the officers also visited the premises of the appellant on 20.09.2018 and after inspection also issued summons calling for various information and documents like copy of price list, buyers agreement, customer ledger, sale deed, agreement for car parking charges, preferential location charges and club membership charges, upto June, 2017, copy of trial balance, copy of Form-26AS etc. The statement of Sh. K. K. Parashar, who was working as Manager (Accounts) was also recorded under Section 14 of the Excise Act, who inter alia stated that M/s Vardhman Developers is a HUF and filed IT returns and maintains proper books of accounts. When flat is booked and agreement is made with the customer, a customer ledger is opened. The amount received from the customer is credited to his account and debited to the concerned bank. On receipt of complete / final payment from the customer, the sales ledger is credited and customer ledger is debited. The amount receive....
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....o consolidated ledger under three heads- (i) Receipts from customer for the financial year 2013-14 to 2017-18. (ii) JCW society (customer security) ledger. (iii) JCW society (DMA for financial year 2012-13). They also submitted electrical ledger and ledger of advance from customer for the period under enquiry. 6. It appeared to Revenue that the appellant is also collecting one time Preferential Location Charges, Car Parking Charges, Club Membership Charges, Interest Free Maintenance Security charges (IFMS), Internal or External Development Charges, Electrical charges, Power Back up charges etc. from their buyers over and above the basic price of flat. On perusal of ST-3 filed by the party, it is observed that the party has not paid service tax on the consideration received by them from their prospective buyers towards these services. 7. It further appeared that w.e.f. 01.07.2012, the term "Service" is defined under Section 65B (44) means any activity carried out for consideration, includes a declared service. Further, under Section 66E clause (b) it appeared that services specified include construction of complex, building, civil structure or a part thereof, including a c....
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....nt of taxation shall be the date of receipt of each such amount. Further, such amount was considered as an advance as entered in the customer ledger. It appeared that there is short payment of service tax for the period under dispute of Rs. 1,39,80,663/-. 11. On perusal of the ST-3 return and price list in respect of flat/ residential complex as submitted, it appeared that appellant has claimed excess abatement on flat-residential complex, having carpet area more than 2000 sq. ft., and cost more than Rs. 1 crore, for the purpose of calculation of tax liability inasmuch as vide Notification No. 26/2012-ST, the rate for calculation of taxable value for the purpose of service tax liability, on construction of residential complex was revised. 12. On the basis of price list of the flats, it was observed that four BHK multi-storeyed duplex was constructed and sold, having area of 2575 sq. ft. and 2710 sq. ft. and their cost is Rs. 1,06,25,000/- and Rs. 1,18,42,500/- respectively. Number of such flats are sold during the period of dispute, hence as per Notification the appellant was required to pay service tax on the 30% of the gross amount received towards the construction of these dup....
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....at full rate of service tax without even classifying and mentioning the category of service under which the same will be taxable. 17. The Commissioner further fails to justify as to how a particular receipt fell under the service head. The Commissioner have erred in relying upon the so-called price list and have computed the tax liability under various heads like PLC, Car Parking, Club Membership charges, IMFC charges, Security deposit, EID Charges, Power Back-up charges, Electrical charges as well as alleged short payment of tax in respect of advances received from the customer. Further, have upheld the charge of excess abatement claim, in terms of the provision of abatement as per Notification No. 26/2012-ST. 17.1 It is further urged that there are no separate charges collected under the aforementioned heads, as alleged by Revenue, which is evident from the books of account maintained in the normal course of business. The appellant charges the basic sale price from its customer which includes the aforementioned charges, which are all bundled in the basic sale price, and on such basic sale price admittedly appellant have paid service tax under the head 'Construction of Complex.'....
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....n the advances received from the customers, on the allegation that the appellant was required to pay service tax as and when advance was received has resulted in double demand of service tax on the same amount, which is fit to be set aside. 17.7 It is further urged that abatement under Notification No. 26/2012-ST as amended, is applicable with respect to the carpet area of the flat, being less than 2000 per sq. ft. or more, and the second criteria being the sale value more than or less than Rs. 1 crore. Higher abatement of 75% is available if both the conditions are met or fulfilled. It is urged that the carpet area of all the flats sold is admittedly less than 2000 sq. ft., although in case of some of the flat the super built area may be more than 2000 sq. ft. (which is not the relevant factor for abatement). Admittedly, no flat has been sold for a value of over Rs. 1 crore. Therefore, the demand on the alleged availment of higher abatement, is fit to be set aside. 17.8 The appellant have also demonstrated in support of the aforementioned submission and proposition, from a copy of 'flats buyer agreement' being an agreement between the appellant and one Sh. Mayank Parasar and Ms.....
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....Jain is the son-in-law of Sh. Umesh Jain, and not the member of HUF. In response to the query - if there is any club or power back up, covered car parking in the project, it was answered that yes there is existence of club, power back up and covered car parking in the project, it was further informed that IFMS charges are @ 25/- per sq. ft.. Further, it was informed that IFMS was included in the buyer agreement. It was also urged that there is evidence of IFMS in a project being handed over to the welfare society or RWA. It was further informed that whatever power back up charges are collected, the same is reflected in the buyer agreement and the amount reflected in the price list is not relevant. It was also stated that there is evidence of collection of electrical charges on behalf of electrical department or towards security deposit etc. for obtaining electrical connection on behalf of the buyer of the flat. Accordingly, prays for allowing the appeal. 18. Learned Authorised Representative appearing for the Revenue relies on the impugned order. 19. Having considered the rival contentions and after examining the records as well as the RUDs/ copy of which is filed by the appellan....
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....n there is no actual receipt of consideration under these heads. Accordingly, we set aside the demand as follows:- 1 Preferential Location charges 2,35,56,977/- 2 Car parking charges 95,00,700/- 3 Club Membership charges 31,66,900/- 4 Interest Free Maintenance Security charges 17,59,052/- 5 Security Charges - separate ledger 1,44,599/- 6 External and Internal Development charges 52,77,158/- 7 Power back up charges 53,31,460/- 21. So far security charges are concerned, we find that this is actually interest free maintenance security charges collected from the prospective buyer of the flat, which are separately shown in the builder buyer agreement and the sale deed, and appellant have maintained separate ledger relating to such collection customer-wise. Such charges are collected by the appellant / builder as a trustee of the flat buyers and such total amount of a project of a building, is handed over to the maintenance committee or RWA at the time of handing over the maintenance alongwith accrued interest etc. if any. Accordingly, we hold that the appellant is not liable to pay service tax on such receipts which are not part of consideratio....