TaxTMI 
TaxTMI 
2022 (3) TMI 1320
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....P. Iscon Pvt. Ltd. are engaged in providing 'Construction of Residential Complex and 'Construction of Commercial Complex' Service. Information was shared by Central Economic Intelligence Bureau, New Delhi with DGGI which inter-alia indicated that search and Seizure proceedings were conducted by DGIT, Ahmedabad against M/s J.P. Iscon Group. The Income tax Authorities provided the documents to DGGI containing Excel Work Sheet which was seized during the Income Tax search from the computer. In view of the information, inquiry was initiated against the Appellant by DGGI. A show cause notice was issued to them for recovery of Service tax of Rs. 13,79,41,328/- in respect of taxable services "Construction of Residential Complex Services / Construction of Commercial Complex Services and Service tax of Rs. 2,98,55,000/- in respect of Work Contract Service supplied during the period 01.04.2014 to 30.06.2017. On adjudication, part demand was dropped and demand of Service tax of Rs. 5,60,28,373/- confirmed in respect of "Construction of Residential Complex Services/ Construction of Commercial Complex Services" with penalty under Section 78 and 77 of the Finance Act, 1994 and Penalty of R....
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....corroborative evidence in the matter of evasion cases needs to produced by the department before levelling allegation against the assessee: (i) CCE Vs. Ravishnkar Industries Ltd. 2002 (150)ELT 1317 (Tri. Chennai) (ii) Kashmit Vanspati (P) Ltd. Vs CCE 1989(39)ELT 655 (Tribunal) (iii) Shabroc Chemicals Vs CCE 2002 (149) ELT 1020 (Tri. Del.) (iv) T.G.L. Poshak Corporation vs. CCE 2002 (140) E.LT. 187 (Tri. Chennai) 6. He also submits that confirmation of demand under the category of 'Construction of Complex Service' is wholly incorrect. The said category would not be applicable on indivisible composite contracts, wherein materials, land and services are provided together. Since the demand of Service tax is raised under erroneous category, the same is not sustainable. Without prejudice he also submits that irrespective of classification under 'work contract service' or 'construction of residential complex service', the demand of service tax on the amount charged by the Appellants for sale of flats is not sustainable in view of the decision of the Hon'ble Delhi High Court in the case of Suresh Kumar Bansal Vs Union of India 2016(43) STR 3 (Del.). ....
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....urable deficiency with respect to the classification of service and computation of tax liability. The impugned Order-In-Original is therefore liable to be set aside. 10. He also contended that Section 132(4) of the Income Tax Act, 1961 is restricted and limited to the provisions of Income tax and same cannot be used or relied upon for other purpose. In the present matter adjudicating authority has relied upon the statement of Ms. Kalindi Shah recorded by the Income Tax Authorities which cannot be used in proceedings under Chapter V of the Finance Act, 1994 in the light of above provision of law. 11. He submits that no demand can be sustainable on the basis of Excel Sheet named 'Platinum -Final -Booking Chart -28-03-2015' allegedly recovered from the computer used by Ms. Kalindi Shah. However she has not been examined and her statement has not been recorded by the revenue. On contrary, the veracity of the data contained in the Excel Sheet has been got confirmed from Shri Venkataramana Ganesna, who was not is possession of the computer and was nowhere related to the data maintained in impugned Excel Sheets. Statement of Shri Venkatarman Ganesna cannot be admitted as evidence in....
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....n the basis of uncorroborated evidence by the department. The Ld Principal Commissioner correctly dropped the said demand and discussed his finding in para 29.5 of the impugned order. 16. On other hand Shri Ghanshyam Soni, the learned Joint Commissioner (Authorised Representative), reiterating the grounds of Appeal filed by the Revenue and finding of Ld. Principal Commissioner to the extent of confirmation of demand of Service tax. He submits that cash receipts under consideration have been found to be noted in diaries and other incriminating documents seized by the income tax authorities. The details contained therein are found to be matching with the .xls sheets recovered from the computer. The facts of unaccounted cash and authenticity of said excel files admitted by Shri Venkataramana Ganesna, President of the assessee in his statements were recorded before investigating officers. Therefore, service tax demand is sustainable in the present case. The order of the Principal Commissioner to the extent of dropping the demand of Service tax amounting to Rs. 8,19,12,955/- in respect of taxable services viz., 'Construction of Residential Complex Services/Construction of Commercial ....
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....nt had given a clean chit to the appellant. In these circumstances, the Tribunal was wholly justified in setting aside the order of the first appellate authority to the extent it had confirmed the demand which had no legal basis, and confirming the order to the extent it had reduced the tax liability imposed by the assessing authority. The second and third questions as proposed, therefore, also do not merit acceptance. Without conducting the independent enquiry, the demand of Service tax only on the basis of document/ information/ data provided by the Income tax authorities by the revenue legally not sustainable. The documents relied upon loses its evidentiary value in absence of any independent enquiry. 19. We find that, in the whole matter revenue rely upon the statement of Ms. Kalindi Shah and Shri Venkataramana Ganesna both are the employees of the Assessee's company. No statement of Directors of the Appellant company recorded by the revenue to find out the truth of employee's statements. It was on records that Assessee company have raised the dispute on both the statements of employees recorded during the course of investigation by Income tax Authority and revenue. There....
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.... has been observed as under :- 8. It will be pertinent at this stage to refer to Section 138 of the Evidence Act which provides : "138. Order of examinations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross-examined, then (if the party calling him so desires) re-examined. The examination and cross-examination must relate to relevant facts but the cross-examination need not be confined to the facts to which the witness testified on his examination-in-chief. Direction for re-examination. - The re-examination shall be directed to the explanation of matters referred to in cross-examination; and if new matter is, by permission of the Court, introduced in re-examination, the adverse party may further cross-examine upon that matter." 9. It would, thus be seen that Section 138 (supra) envisages that a witness would first be examined-in-chief and then subjected to cross-examination and for seeking any clarification, the witness may be re-examined by prosecution. There is, in our opinion, no meaning in tendering a witness for cross-examination only. Tendering of a witness for cross-examination, as a matter of....
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....tanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned under sub-section (2) are satisfied, without further proof or production of the original. The very admissibility of such a document, i.e., electronic record which is called as computer output, depends on the satisfaction of the four conditions under Section 65B(2). Following are the specified conditions under Section 65B(2) of the Evidence Act : (i) The electronic record containing the information should have been produced by the computer during the period over which the same was regularly used to store or process information for the purpose of any activity regularly carried on over that period by the person having lawful control over the use of that computer; (ii) The information of the kind contained in electronic record or of the kind from which the information is derived was regularly fed into the computer in the ordinary course of the said activity; (iii) During the material part of ....
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.... Evidence Act are not complied with, as the law now stands in India. 18. It is relevant to note that Section 69 of the Police and Criminal Evidence Act, 1984 (PACE) dealing with evidence on computer records in the United Kingdom was repealed by Section 60 of the Youth Justice and Criminal Evidence Act, 1999. Computer evidence hence must follow the common law rule, where a presumption exists that the computer producing the evidential output was recording properly at the material time. The presumption can be rebutted if evidence to the contrary is adduced. In the United States of America, under Federal Rule of Evidence, reliability of records normally go to the weight of evidence and not to admissibility." The above prescribed certain guidelines were not followed by the revenue during the investigation of impugned matter before accepting electronic documents as an admissible piece of evidence. Therefore in our view no service tax demand is sustainable on the basis of contents of said .xls sheets. 25. Further on the basis of details of investigations shared by the Income tax Authority, Revenue knew the name of author of said xls. sheet but revenue failed to record the s....
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.... our above finding, we also find that in the present matter the Ld. Adjudicating Authority confirmed the Service tax demand of Rs. 5,60,28,373 in respect of taxable Service viz. "Construction of Residential Complex Service/ Construction of Commercial Complex Service" by assuming that the said service was provided by the assessee during the period from 01.04.2014 to 30.06.2017 and entire cash amount under consideration has been received by the assessee during the period from April 2014 to June 2017. The Ld. Adjudicating Authority in present case also dropped the demand on the ground that in all cases where the assessee have entered into a sales deed or an Agreement to sale prior to 01.04.2014, the amount have been received prior to the said date. However we find that he did not apply the same principle to letters of reservation on the ground that the same is not a contract and confirmed the demand of service tax. The Appellant produced the copies of said letters of reservation before us and we noted that letter of reservation demonstrate that the assessee has bound themselves to sell a particular flat at a particular consideration. Hence, the effect of such letters is not different ....
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.... instant case in as much as : >There is no contract entered into between the assessee and the customers for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of immovable property; AND >There is no transfer of property in goods involved in the transaction between the assessee and their customers. Thus, the transaction at hand viz., sale of vacant plot is not covered under the ambit of the term 'Work Contract' as defined under Sec. 65B (44) of the Finance Act, 1994. 26. The Show cause notice has relied upon the ratio of the case law of M/s K Raheja reported at 2006 (3) STR 337 (SC) which was affirmed in the case of M/s Larsen & Toubro Ltd. reported at 2014 (303) ELT 3 (SC) to drive home the point that an agreement to sell an immovable property could also be treated as 'Work Contract'. The assessee have contended that the analogy of the case of M/s K Raheja is not applicable to the facts of the case since the factual matrix of the same is entirely on a different footing than the case at hand in as much as the activity undertaken by M/s K Raheja was c....
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....lopment of infrastructure/amenities, lay -out approval etc. was a 'Service' within the meaning of Clause (o) of Section 2(1) of the Consumer Protection Act. The assessee have argued that the said Judgment would not be applicable to their case since the definition of the term 'service' under the Consumer Protection Act was different from the definition under Sec. 65B(44) of the Finance Act, 1944. Further it has been contended that in the case of M/s Narne Constructions, separate amount as development charges had been collected from the customers which was not so in the present case. In support of their argument, the assessee relied upon para 9 of Writ Petition 429 of 2010 of High Court of Andhra Pradesh which read as under : " Although as per the allotment, Rs. 90/- per square yard alone was to be paid towards development charges, the opposite party unilaterally enhanced in to Rs. 75000/- i.e at Rs. 150 per square yard which the complainant paid. The opposite party again enhanced the said charges to Rs. 1,25,000/- at Rs. 250/- per square yard" In the instant case, there is nothing on record to indicate that the assessee had collected a separate charges towards deve....
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....f sale of plots with undeniable condition of development of amenities and common facilities such as electricity supply, drainage, water supply, club house etc. can be construed as "Work Contract" or otherwise. 27.1 In the light of specific charges, I cannot examine the issue under a different category of service or any other aspect. This is so because the well settled judicial principles do not permit the adjudicating authority to travel beyond the show cause notice. I would like to refer to a few of such judicial pronouncement as under : a) In the case of M/s Sunrise Structurals & Engg. Pvt. Ltd. as reported at 2002 (48) ELT 503 (T) which is affirmed by the Hon'ble Apex Court as reported at 2003 (154) ELT A241(SC), the Tribunal had made the following observations: "However, the notice proceeded on the footing that what was to be added was the profit of the job worker. Therefore, any finding that what was to be included any element other than these would be beyond the scope of the notice, and therefore impermissible". b.) In the case of M/s Reliance Ports and Terminals Ltd. reported at 2016 (334) ELT 630 (Guj), the Hon'ble High Court of Gujrat ha....
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....ditions of development of amenities and common facilities such as electricity supply, drainage, water supply, club house etc. can be construed as "work contract" or otherwise. In light of the elaborate discussion hereinabove, I find that such activity cannot be construed as "Work Contract" in as much as the activity is not covered within the four corners of definition of 'Work Contract' in terms of the provisions of Sec. 65B(54) of the Finance Act, 1994. 27.2 Now the second part of the show cause notice is the demand part wherein the service tax has been demanded on the taxable service viz., 'Work Contract Service' Since the activity has been found to be out of the purview of " Work Contract", the said activity cannot be said to be a 'declared service' in terms of the provisions of Section 66E(h) of the Finance Act, 1994 in as much as the said declared service is restricted to the service portion in execution of work contract Resultantly the said activity is not covered within the ambit of work contract service as defined under Section 66 E(h) of the Finance Act, 1994. Once a service has been classified under a particular head and the same is not found to be covered under ....
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....pur-II [2019 (3) TMI 39 - CESTAT, New Delhi]. (ii) M/s. Choudhary Stone Crushing Co. v. Commissioner of Central Excise and Service Tax, Jaipur-II [2019 (3) TMI 38 - CESTAT, New Delhi] (iii) CGST - Delhi-III v. Lattice Interiors (Vice-Versa) [2019 (2) TMI 1308 - CESTAT, New Delhi]. (iv) M/s. Srishti Constructions v. Commissioner of Central Excise and Service Tax, Ludhiana [2018-TIOL- 337-CESTAT-CHD] 13. In M/s. Choudhary Stone Crushing Company, the Tribunal observed as under :- 8. For period commencing on 1-6-2007, the composite services would be liable for classification under Works Contract Service only. But we note that Show Cause Notice has proposed the demand for service tax under the category of Commercial and Industrial Construction Service as well as Repair and Maintenance Service. Hence we are of the view that the confirmation of demand under the category of WCS will not be proper particularly in view of the decision of the Tribunal in case of Ashish Ramesh Dasarwar (supra) wherein Tribunal has taken the view that demand for Service Tax is to be set aside if the Show Cause Notice proposed a classification different from WCS for c....
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....vied or short-paid or erroneously refunded, Central Excise Officer may, within thirty months from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "thirty months", the words "five years" had been substituted. Accordingly, I find that the cash amount to the tune of Rs. 80,82,79,171/- (Rs. 76,12,95,585/- pertaining to the scheme Iscon Platinum as summarized at Annx. A-1 to ....
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....time period prescribed under Rule 4A of the Service Tax Rules, 1994, then point of taxation shall be the date of completion of provision of service. Thus it is obvious that the event of taxation and point of taxation do not depend on realization of consideration against the provision of service but the relevant factor for taxability is provision of service and the point of taxation shall be as per Rule 3 of Point of Taxation Rule, 2011. In the instant case it is undisputed that the noticee has not issued any invoice for the consideration received in cash, as the consideration itself was suppressed. Therefore in terms of Rule 3 of Point of Taxation Rules, 2011 the point of taxation shall be date of completion of provision of service which has already been completed on the date on which event had been organized. Accordingly, the amount which is yet to be received, and shown as 'Outstanding' service already provided shall be taxable and the point of taxation shall be determined in terms of Rule 3 of Point of Taxation Rules, 2011. As against the said allegation, the assessee have contended that Service tax cannot be demanded on the amount which had not been received and was sh....
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....guage used in the above statute is that in absence of consideration, the activity cannot be termed as a 'service' . This theory has also been taken cognizance of at para 2.2.2. of the Service Tax Education Guide which read as under: 2.2.2 What are the implications of the condition that activity should be carried out for a 'consideration'? • To be taxable an activity should be carried out by a person for a 'consideration' • Activity carried out without any consideration like donations, gifts or free charities are therefore outside the ambit of service. For example grants given for a research where the researcher is under no obligation to carry out a particular research would not be a consideration for such research. • An act by a charity for consideration would be a service and taxable unless otherwise exempted. (for exemptions to charities please see Guidance Note 7) • Conditions in a grant stipulating merely proper usage of funds and furnishing of account also will not result in making it a provision of service. • Donations to a charitable organization are not consideration unless charity is obligated to pro....
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....nalysis of the amendment to Rule 6(3) of the Service Tax Rules, 1994 is required for the purpose of understanding the purpose and effect of such amendment. The text of the said rule pre-amendment as well as post-amendment is reproduced for ease of reference. Prior to amendment Where an assessee has issued an invoice, or received any payment, against the service to be provided which is not so produced by him either wholly or partially for any reason, the assessee may take the credit of such excess service tax paid by him, if the assessee- (a) has refunded the payment or part thereof, so received alongwith the service tax payable thereon for the service to be provided by him to the person from whom it was received; or (b) has issued a credit note for the value of service not so provided to the person to whom such an invoice had been issued. After amendment with effect from 01.04.2011 Where an assessee has issued an invoice, or received any payment, against a service to be provided which is not so provided by him either wholly or partially for any reason, or where the amount of invoice is renegotiable due to deficient provisions of....
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....he mechanism for adjustment of underlying principle of receipt based levy of service tax has continued even after the change in the point of taxation. In other words, service tax is chargeable only on the amount that is received by the service provider even after the amendments w.e.f 01.04.2011. 29.4.5 The investigation has also adhered to the above principle in as much as the service tax has only been calculated on the outstanding cash payment and not on the outstanding cheque payment. This is evident from Annexure A-1 and B-1 to the SCN where Column M is the sum total of 'Cash Received - Column H' and 'Outstanding Cash- Column L'. The applicable abatement has been calculated on such cash amount and the taxable value after deducting the abatement has been arrived at in the Colum O and K of Annexure -A1 and B1 to the SCN shows outstanding amount of Rs. 17,64,87,394/- and Rs. 11,03,02,581/- respectively and no service tax has been computed on such amounts which are shown as outstanding towards cheque payment. 29.4.6 In light of the above discussion, I find that there is consideration force in the contentions of the assessee to the effect that service tax is not cha....
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....ount that the name appearing in the said documents are not the person to whom such units have been sold. The assessee have produced copies of Sale Deeds in respect of the entries under contention and scrutiny of the said sale deeds indicate that the flat at at Annexure C-1 to the SCN in respect of which the allegation have been made have been sold to the following person (as detailed mentioned in OIO) The above indicates that except for Sr. No. 1 the name of the buyer as shown in the chit is not matching with the name of the buyers as per sales deed. 29.5.3. Further, as pointed out by the assessee in their written submission, entries at Sr.Nos. 1 to 30 are pertaining to the entries as found in the documents and the Annexure -C1 to SCN itself has shown the same of the customer as per the document and the name of the customer as per the ledgers of the assessee which are found to be differing in majority of the cases. The comparison from the relevant column of Annexure C-1 to the SCN is reproduced under the ease of reference. (Detail in OIO) The above comparison reveals that apart from the entries at Sr. Nos .1 ,7, and 18, the Customer to whom the flats have....
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....ith a brokerage proposal to sell the flats listed in the above sheet at attractive rates in return for a brokerage amount. Since we were having direct inquires for these flats, she did not entertain this brokerage proposal and the paper remained in her house. Q 35. The above sheet contains details of flat No. of Iscon Platinium (Phase -2) and it is also found that name mentioned against are tour buyers. For all Illustration, at Sr. No. 1 of the said sheet flat No. M-1102 of Iscon Platinium -Phase -2 the buyer name is showing Mr. Dua and the same also cross verified from you flat ledgers that the same flat with saleable area mentioned in the sheets is sold to Mr. Dua. Please offer your comments. A.35 : As I have already state above this sheet is prepared by a broker who is not related to us and discussed above given a proposal to our employee Mrs. Kalindi Shah to get buyers. With respect to specific case of flat No. M1102 the name of customer is Ms Jaspal Singh J Dua and as stated above we have directly dealt with him for sale of the flat and not through the above mentioned brokerage data. I further retreated that this is data prepared by a broker for his own busin....