AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1470
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....e service of 'Construction of Residential Complex Services',as defined in Section 65(30a) of the Finance Act, 1994 & taxable under clause of 65(105) (zzzh) of the Finance Act, 1994 up to 30.06.2012. From 01.07.2012, the said services of construction of complex, building or civil structure or part thereof was covered under declared service Section 66E(b) of the Finance Act 1994. The notice alleged that the appellant had evaded Service tax amounting to Rs.1,72,20,400/- for the period 2011-12 (Oct-2011 to March-12) to 2014-15. The matter was adjudicated vide Order-in-Original No. 4/ST/UDR/2017-18 dated 24.01.2018, the Joint Commissioner confirmed the demand along with interest and penalty. Aggrieved by the said order-in-original, the appellant filed an appeal before the Commissioner(Appeals), who rejected the appeal and upheld the order-in-original. The appellant filed the present appeal before the Tribunal. 3. Learned counsel for the appellant submitted that the demand for the period from October, 2011 to 30.06.2012 is not sustainable as UIT Kota, a local authority is a nodal agency of the Government of Rajasthan and is not covered under the definition 'Person'. ....
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.... Act. In term of letter dated 22.01.2016 issued to the appellant, the Kansua Housing scheme, Kota, satisfied the criterion of Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana. 4.2 Learned counsel further added that the demand for the period from 01.07.2012 to 31.03.2015 was also not sustainable as the appellant was entitled to benefit of exemption under S.No.12 of Notification No. 25/2012-ST dated 20.06.2012. He submitted that after introduction of negative list, "construction of complex, building, civil structure or a part thereof including complex or building intended for sale to a buyer wholly or partly" is a Declared Service under Section 66E of the Finance Act, 2012. 4.3 Learned counsel stated that the appellant had claimed exemption from payment of service tax under Notification No.25/2012-ST (SI. No.12) as they had provided service to the Local Authority-UIT, Kota for new construction of flats for residential purposes for economically weaker sections (EWS) and LIG persons under the Government of Rajasthan "Affordable Housing Policy-2009". The Commissioner (Appeals) had disallowed the exemption contending that "the exemption is available only when ....
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....CE, Chandigarh-1 -2007 (216) ELT-177-SC has held that since the expression "suppression" in proviso to Section 11A is accompanied by very strong words such as "fraud" or "collusion", it has to be construed strictly and mere omission to give information is not suppression of facts unless it was deliberate act to evade payment of duty. It is a settled legal position that when the matter relates to interpretation, extended period cannot be invoked and no penalty is imposable as held in Larsen and Toubro Ltd. Vs Commissioner of Central Excise-2007 (211) ELT 513 (SC). In view of the above submissions, learned counsel rout ended that the demand was not sustainable. Consequently, no interest under section 75 and no penalty equivalent to 50% of the service tax demand was sustainable. Learned counsel relied on Hon'ble Supreme Court's decision in the case of M/s HMM Lid. Vs. Commissioner of Central Excise-1995 (76) ELT-497 (SC) wherein it was held that there is no penalty and interest if the demand is held to be unsustainable. The learned counsel also relied on the following decisions:- (i) Commissioner of Central Excise vs. Kisan Mouldings Limited-2010 (260) ELT 167 (SC) ....
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....er clause (c) of Sl. No. 14 of Notification No. 25/2012-ST dated 20.06.2012 above and is not eligible for exemption from levy of service tax. 5.1 Learned Authorized Representative further submitted that the clause (ca) was added to Serial No. 14 of Notification No. 25/2012-5T w.e.f. 01.03.2016, which provided exemption to construction of low cost housing up to carpet area of 60 Square meter per house in a housing project approved by competent authority under:- (i) The "Affordable housing in partnership" component of the Housing for all (Urban)Mission/Pradhan Mantri Awas Yojana. (ii) Any housing scheme of a State Government. Thus, insertion of clause (Ca) in Serial No. 14 of Mega exemption Notification with effect from 01.03.2016, to include all housing project of Urban Mission/PradhanMantri Awas Yojana and any housing Scheme of a State Government for exemption from levy of service tax clearly implied that such projects were not covered under clause (c) earlier and therefore, a specific clause has been inserted on 01.03.2016 to clarify the position. Learned Authorized Representative further submitted that exemption under Sl. No. 12 of Notification No. 25/2012 date....
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....he work done by them from the date 15.12.2011 to 20.06.2012. Thus, the date of receipt of payment by the service provider implied completion of provision of services for different stages, as agreed in the agreement. Consequently, the date of receipt of payment was the relevant date for computation of the service tax liability.As per the Affordable Housing Scheme (Model No. 2), which is in respect of Private Developer on Private Land - the land owner will provide his land for conversion and development before the UIT und the UIT under this scheme will not charge any conversion fees, development fees, building plan fees, external development charge etc. from the land owner and land will be converted for Commercial use. In such scheme, the land owner will use only 40% land for construction of EWS & LIG Flats under affordable housing project, whereas entire land was to be converted by UIT for commercial use. Thus, it is apparent that the service provider had been given the benefit of 100% land and further they were required to use only 40% of the land for construction of EWS and LIG flats. The remaining 60% land which in their possession, they were required to construct MIG A houses in....
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.... is reproduced hereinafter. The service 'Construction of complex' was introduced with effect from 16.06.2005 under Finance Act, 1994. Sec. 65 (30a) defines the service 'construction of complex' as- "(a) construction of a new residential complex or a part thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation, residential complex." 6.1.1 It is evident that the construction of residential complex was subject to service tax with effect from 16.06.2005. Sec. 65(91a) defines the term 'residential complex'. According to this section 'residential complex' means any complex comprising of- (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or servi....
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....s an enlargement of the natural meaning of the expression 'person', even the extended meaning does not include the State." Their submission is that Superintendent of Police is an authority of the State Govt. to carry out statutory and constitutional duties. The definition of the term "person", (which does not cover the Govt.) in the General Clauses Act, 1897 is given as follows :- "42. "Person" shall include any company or association or body of individuals, whether incorporated or not,". In the light of the definition of the term "person" in the General Clauses Act, 1897, which has also been examined and clarified by the Apex Court, it would appear that the Superintendent of Police, which is an agency of the State Govt. does not appear to be covered within the term "person". It is also noteworthy that in the year 2012 when the pattern of levy of service tax was changed and the concept of negative list was introduced with effect from 1-7-2012, a definition was introduced for the term "person" in Section 65B(37), of the Act, which includes the Govt., local authorities, etc. From this, it is evident that such a definition for the term "person" has become part....
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.... of Architecture constituted under the Architects Act, 1972 (20 of 1972); or (B) chartered engineer registered with the Institution of Engineers (India); or (C) licensed surveyor of the respective local body of the city or town or village or development or planning authority; (II) the expression "construction" includes additions,alterations, replacements or remodelling of any existing civil structure;..................." 6.2.1 The ld Counsel has claimed exemption under sl no 12 of the aforesaid notification 25/2012 dated 20.6.2012. The said clause of the notification is reproduced for ease of reference: "12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession (b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or 2/8 antiquity specified under the Ancie....
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.... based its decision on the fact that functions carried out by the assessee are statutory functions and it is carrying on the functions for the benefit of the State Government for urban development. The said reasoning cannot lead to the conclusion that it is a Municipal Committee within the meaning of Section 10(20) Explanation Clause (iii). The High Court has not adverted to the relevant facts and circumstances and without considering the relevant aspects has arrived at erroneous conclusions. Judgments of the High Court are unsustainable............................................." 6.2.3 Although the aforesaid judgment was in respect of the Income Tax Act, but the ratio can be applied in the instant case. In view of the above, it cannot be accepted that the UIT, Kota is a governmental authority. 6.2.4 Further, there is nothing contrary to the finding that the said construction of residential complex was for sale to EWS/LIG category, but it was for the purpose of commerce, albeit not at the market rate. It is also an admitted fact that the Kansuwa Housing Project was not approved under the Central Scheme of Affordable Housing in Partnership of the Ministry of Housing and Urba....
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.... the service is determined periodically on the completion of an event in terms of a contract, which requires the receiver of service to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service. In the instant case, we note that the "construction of residential complex" service provided by the appellant falls under the category of continuous supply of service. Further, as submitted by the Ld AR, we note that para 24 of the agreement entered by the appellant with the UIT, the payment was to be released to them on completion of stages as laid down thereunder. Further, the UIT vide their letter dated 06.07.2016 had also clarified that payment of Running Bills No. I to VI had been released for the work done by them from the date 15.12.2011 to 20.06.2012. Thus, the date of receipt of payment by the appellant, i.e. the service provider, implied completion of provision of services for different stages, as agreed in the agreement. Consequently, we uphold the findings of the impugned order in this regard. 6.4 Ld Counsel for the appellant has submitted that extended peri....
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....wise. A perusal of the proviso indicatesthat it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression." (emphasis supplied) 6.4.1 The Delhi High Court in Bharat Hotels Limited vs. Commissioner of Central Excise (Adjudication)- 2018 (12) GSTL 368 (Del.) also examined at length the issue relating to the extended period of limitation under the proviso to section 73 (1) of the Finance Act and held as follows: "27. Therefore, it is evident that failure to pay tax is not a justification for imposition of penalty. Also, the word "suppression' in the proviso to Section 11A(1) of the Excise Act has to be read in the context of other words in the proviso, i.e. "fr....