TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1220
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....ies. The Appellant is appropriately registered under Service Tax law with the jurisdictional Service Tax Authority. The Appellant has been also regular in discharging applicable service tax and filing the periodical Service Tax Returns with the jurisdictional Service Tax Authority. 2.1. The disputed demand as per the impugned Order-in-Appeal is tabulated below: Period Amount (Rs.) Nature of demand 2006-07 16,06,922 Simultaneous benefit of Notification No. 1/2006-ST dated 01.03.2006 and availment of Cenvat Credit on input services under Notification No. 18/2005-ST, dated 07.06.2005 2005-06 & 2006-07 2,42,413 Maintenance & Repair Charges 2005-06 & 2006-07 23,58,945 Club or Association Service 2005-06 & 2006-07 22,817 Security Services 2006-07 2,71,320 Irregular availment of Cenvat credit on input services 3. Regarding the demand of Rs. 16,06,922/- towards taking simultaneous benefit under Notification no. 1/2006 and CENVAT Credit on input services, the Appellant submits that "construction of residential complex" was brought under service tax net w.e.f. 16.06.2005 and accordingly the Appellant obtained service tax ....
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....tion no. 18/2005 ST dated 07.06.2005 by Notification no. 1/2006 -ST dated 01.03.2006 had the simultaneous effect of coming into being the Notification no. 1/2006 - ST dated 01.03.2006 and thus CENVAT Credit on input services as well as 67% abatement on the value of taxable services cannot be availed by the Appellant. However, in the impugned Order - in - Appeal, the Ld. CCE (Appeals - I) stated that since realization of payment from the service recipient occurred during the FY 2006-07, when Notification No. 1/2006 -ST dated 01.03.2006 was in vogue, benefit under Notification No. 18/2005 -ST dated 07.06.2005 could not be availed. Thus, the Ld. CCE (Appeals - I) travelled beyond the scope of SCN to reconfirm the demand earlier dropped in the Order-in-Original, which is clearly untenable in law. Thus, the appellant submits that the impugned demand is liable to be dropped on this ground alone. In this regard reliance may be placed on the decision of the Tribunal, Ahmedabad in the case of N.D. Metal Industries Ltd. versus Commissioner of Central Excise, Vapi [2013 (292) E.L.T. 520 (Tri. - Ahmd.)] 3.3. The Appellant submits that during the relevant period (16.06.2005 to 28.02.2006), the....
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....h income group buyers, presently being maintained by Udita Owners' Association; * Utsarg-Utsav Complex - meant for low and middle income group buyers, presently being maintain by Utsarg-Utsav Co-operative Housing Society Ltd.; * Unnayan Complex -meant for commercial use, presently being maintained by Unnayan (Survey Park) Welfare Association; * STP Zone - consisting of Sewerage Treatment Plant meant for common use of all the above three zones. 4.1. The Appellant states that out of the aforesaid complexes, the maintenance of Udita Complex, Utsarg - Utsav Complex and Unnayan Complex was done by the respective Owner's association and there was no involvement on the part of the Appellant. Whereas, the STP zone was supposed to be owned, managed and maintained by a separate body corporate to be promoted by the allottees of Udayan-The Condoville. However, since the allottees were yet to form the said body corporate, the Appellant being the promoter and developer of the housing project and considering the importance of the STP zone, had to arrange for the maintenance of the STP by procuring the maintenance services and paying for electricity expenses for and on behalf of the allotee....
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....lue in view of the judgement of Hon'ble Supreme Court in Intercontinental Consultants & Technocrats Pvt. Ltd., reported in 2018 (3) TMI 357. 4.6. In view of the above submissions, the appellant prayed for setting aside the demand confirmed in the impugned order on this count. 5. In regard to the demand of Rs.23,58,945/- under "Club & Association Service" the Appellant states that the demand of Rs.23,58,945/- pertains to collection of deposit and receipt of construction charges for club facility totaling to Rs.1,99,90,750/- in respect of its two residential projects namely "Utsa" and "Ujjwala" respectively. In this regard, the Appellant states that during the FY 2002-03 to 200405, they have collected an aggregate amount of Rs.35,90,000/- towards 'refundable deposit' for club from the members of the "Utsa" and the same was also refunded to the Association on 21.05.2008 along with interest once the Apartment Owners Association was formed. The Appellant further states that they have collected from the prospective buyers of the residential units of "Ujjwala" an amount of Rs.7,42,000/- and Rs.1,56,58,750/- during the FY 2005-06 and FY 2006-07 respectively for construction and handing o....
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....t they were not engaged in the business of rendering the services relating to security of the flats neither it provided any security services to any of the allottees in the residential complexes constructed by it. In fact it is a form of penalty for not taking the physical possession within the stipulated time framed by the Appellant and no underlying service is involved in the instant case. 6.3. In view of the above facts, the Appellant contends that since compensations received for not taking physical possession of flats cannot be construed as providing security services to any person, the Appellant is not liable to service tax on the compensations received as guarding charges from the allottees of the flats. Accordingly, the Appellant submits that the amount recovered was in the nature of penalty and not for providing security services and hence the same cannot be subjected to service tax. Hence the demand is liable to be set aside. 7. In regard to recovery of Cenvat Credit amounting to Rs.2,71,320/-, the Appellant submits that they have paid Service Tax of Rs. 2,71,320/- along with interest of Rs. 1,85,345/-, and 25% penalty amounting to Rs. 67,830/-, under protest, as per se....
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....he benefit of Notification No. 18/2005-ST, dated 07.06.2005, which was in existence during the relevant period, which did not restrict taking Cenvat Credit on input services. We observe that the project was completed and handed over to HIDCO by the appellant prior to 28.02.2006. However, certain outstanding payment in this regard was received by the Appellant during the financial year 2006-07. Since the provision of construction services was completed before issue of Notification No. 1/2006-ST dated 01.03.2006, we hold that the Appellant has correctly taken the benefit of Notification No. 18/2005 -ST dated 07.06.2005 which did not restrict the availment of Cenvat credit on input service and it only restricted the availment of Cenvat credit on inputs and capital goods which the Appellant never taken and there was no dispute on this. Thus, we observe that the Notification No. 1/2006-ST dated 01.03.2006 available during the time of receipt of payment has no relevance for the services rendered, as the appellant has rightly availed the benefit of Notification No. 18/2005-ST, dated 07.06.2005, which was in existence during the relevant period, when the service was rendered. We observe th....
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....e expenditure so incurred was reimbursed on actual basis by the allottees through the maintenance association of the allottees. We observe that the Appellant neither rendered any management and maintenance service to the allottees of "Udayan-The Condoville" nor received any consideration towards the same during the relevant period. Accordingly, we hold that the appellant has only acted as a "pure agent" of the allottees of the units and not rendered any management and maintenance service to the allottees. Hence, we hold that the demand confirmed in the impugned order on account of this issue is not sustainable. 12.1. Even after the introduction of Service Tax (Determination of value) Rules 2006, we observe that the expenses incurred by a pure agent is not includible in the taxable value in view of the judgement of Hon'ble Supreme Court in Intercontinental Consultants & Technocrats Pvt Ltd., reported in 2018 (3) TMI 357. The relevant part of the said decision is reproduced below: 12.2. Thus, in view of the discussions and by relying on the decisions cited supra, we set aside the demand confirmed in the impugned order on this count. 13. Regarding the demand of Rs.23,58,945/- under....
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....ring the services relating to security of the flats neither they provided any security services to any of the allottees in the residential complexes constructed by them. We observe that the 'Guard Charges' collected is in the form of penalty for not taking the physical possession within the stipulated time framed by the Appellant and no underlying service is involved in the instant case. Accordingly, we hold that the Appellant is not liable to pay service tax on the compensations received as guarding charges from the allottees of the flats. Hence, we set aside the demand confirmed under the category of "security agency service" on the amount received by the appellant as 'Guarding Charges'. 15. Regarding the order for recovery of Cenvat Credit amounting to Rs.2,71,320/-, we observe that the appellant have paid Service Tax of Rs. 2,71,320/- along with interest of Rs. 1,85,345/-, and 25% penalty amounting to Rs. 67,830/-, as per second proviso to Section 78 of the Finance Act, 1994 on 26.05.2011. The appellant also submitted the copy of the challan dated 26.05.2011, evidencing the payment. Thus, we observe that the issue is not contested by the appellant and hence we uphold the deman....