TaxTMI 
TaxTMI 
2009 (5) TMI 67
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....PFL to pay service tax due. Adjudicating allegations of non-payment/short-payment of service tax on various activities, Commissioner passed the impugned order demanding an amount of Rs.1,45,83,020/- towards service tax, appropriating an amount of Rs.1,14,74,367/- paid towards the above liability, demanding interest of Rs.1,07,419/- for delayed payment of service tax from February 2006 to 2007, appropriating Rs.1,07,419/- paid by the assessee towards interest and demanding interest due for delay in payment of balance dues of service tax. A penalty of Rs.1.50 crore was imposed on the appellants under Section 78 of the Finance Act, 1994 (the Act) in addition to penalty under Section 76 of the Act. 2. Demand raised falls under various categories as follows. PFL had not paid service tax of Rs.8,64,668/- towards service rendered under the category commercial or industrial construction service (Prince Infocity) upto 11.5.2007. The assessee explained that they had not paid the tax as they had not charged their buyers. Service Tax of Rs.40,84,010/- towards construction of residential complex, namely, Prince Greenwood had not been paid though it had received amounts towards construction of ....
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....Government within the stipulated time. Hence the demand of tax, interest and penalties. 4. The appellants have challenged the impugned order on the following grounds: (a) As regards the demand of service tax relating to commercial complex 'Infocity', the appellants submit that the levy 'commercial or industrial construction service' was imposed on 10.9.2004 and construction of Prince Infocity had commenced before 10.9.2004 and completed after 10.9.2004. Service tax was payable only for the construction activity classifiable under the subject heading rendered by the assessee from 10.9.2004 onwards. The impugned order had confirmed demand on receipts towards construction of the above complex prior to 10.9.2004. Moreover, the taxable value was adopted wrongly deducting an amount of Rs.2,04,560/- instead of Rs.6,69,870/- towards stamp duty and registration expenses. As per Notification No. 18/ 2004-ST dated 10.9.2004, value of taxable services received prior to 10.9.2004, in respect of services on which service tax was imposed with effect from 10.9.2004, was exempted from payment of service tax. The appellants suggested consumption of ready mix concrete as a reliable parameter to det....
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....s.8,97,874/- and cess of Rs.17,957/- [car parking, contingency, TNEB charges] and Rs.3,04,713/- and cess of Rs.6,094/- [towards TNEB charges and CMWSSB (water & sewage)] respectively for residential complex Prince Greenwoods and ASTP are challenged on the basis that the activities involved were part of works contract and rendered before works contract service was introduced on the statute on 1.6.07. Also PFL being a developer was not liable to tax as clarified by the CBEC in the Circular cited, Demand towards service tax under construction of residential complex service for the month April 2007 in respect of Prince Greenwood residential complex is also challenged on the same grounds. 6. Demand of tax in respect of amounts received towards corpus fund/maintenance from the buyers in respect of the two commercial complexes and Prince Greenwoods residential complex is assailed on the basis that these funds were collected and retained by the appellants as a custodian which would eventually be handed over to the association of owners when the projects were completed and the flats/premises transferred in the name of the buyers. If any maintenance work was carried out by PFL, it was incid....
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....ey, the same was not taxable before 19.4.2006. On 19.4.2006 provisions for demanding tax on such consideration were introduced in the statute for the first time by way of Service Tax (Determination of Value) Rules, 2006. For constructing flats in exchange for the land received from the owner of the land demand could not therefore be validly raised for the period of dispute. Out of the 6th, 7th, 8th and 10th floors due to the land owner, the 6th floor had been directly sold by the appellants as ready-built unit. In such transaction no taxable service was involved. Also the demand of tax of Rs.3,49,985/ for service rendered under an additional contract treating the same as completion and finishing services is challenged on the ground that such demand would be sustainable only if the appellant had not provided any other service. The work rendered under additional contract was also a separate works contract executed before 1.6.2007. Therefore, the demand was not legal. The non-payment or delay in payment of service tax was ascribed to the confusion that prevailed at the initial stage of promulgation of tax. The provisions involved accommodated different interpretations. Therefore, the ....