TaxTMI 
TaxTMI 
2025 (10) TMI 1194
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....p together for the purpose of discussion and decision. We may take Appeal No. ST/52410/2015 as a lead case and extended period of limitation has also been invoked in this case. Appeal-wise details of SCNs, Impugned Orders, Period and Demand are given herein below in tabular form: S. N. Appeal No. SCN Impugned Order Period Demand (in Rs.) 1. ST/52410/2015 V(ST)15/Adj/ 61/2013/ 2485 dated 22.04.2013 V(ST)15/Adj/ 58/2014/ 868-870 dated 23.05.2014 OIO No. CHDCEX-001-COM05-06-15 dated 29.01.2015 2007-08 to 2011-12 2012-13 5,31,35,473 5,52,42,804 2. ST/60528/2017 V(ST)15/CE/ Adj/59/2015/ 264-266 dated 21.10.2015 OIO No. CHDCEX-001-COM07-08-2017 dated 28.03.2017 2013-14 8,29,73,758 3. ST/60556/2017 V(ST)15/CE/ Adj/34/2016/ 73 dated 09.05.2016 OIO No. CHDCEX-001-COM07-08-2017 dated 28.03.2017 2014-15 4,50,80,354 2. Briefly stated facts of the present case are that the Appellant M/s Himachal Pradesh Housing & Urban Development Authority Shimla (in short 'HIMUDA') is a statutory authority established under the Himachal Pradesh Housing and Urban Development Authority Act, 2004, primarily to satisfy needs of....
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....ts that the first SCN dated 22.04.2013 was issued to the Appellant alleging that certain services or revenue of the Appellant are leviable to service tax under the taxable category of renting of immovable property. He further submits that until 30.06.2012 i.e. before the introduction of the negative-list based regime, the service tax was payable by the service provider in respect of the specific services as defined under Section 65 of the Finance Act, 1994, whereas, in the present case, the SCN proposed to levy service tax in respect of various transactions undertaken by the Appellant under three heads/services namely renting of immovable property services, business auxiliary services and consulting engineer services. He further submits that the said SCN merely lists the services and alleges that these services fall under the category of renting of immovable property, business auxiliary services and consulting engineering services without specifying under which specific category each of the receipts falls and how it qualifies to fall under the specific category of service. He also submits that the demand proposed in the said SCN is not sustainable on this vary ground as held in the....
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....liable to service tax under any of the taxable categories referred to in the SCN and the impugned OIO. 4.4 The learned Counsel further submits that the demand for the period 2012-13 was proposed by issuing a Statement under Section 73(1A) of the Finance Act, 1994 instead of a proper SCN, which is legally untenable because - Section 73(1A) permits issuance of a statement only when it pertains to the same grounds as an earlier SCN. - The earlier SCN dated 22.04 2013 was under the pre-negative list regime, whereas FY 2012-13 (post 01.07.2012) falls under the negative list-based regime indicating a material change in the legal basis. - Moreover, new grounds such as construction services were introduced in the statement that were not part of the earlier SCN. - This renders the statement dated 23.05.2014 beyond the scope of Section 73(1A) and therefore, the demand raised for 2012-13 is unsustainable and void. - The department appears to have acknowledged this error, as it issued fresh SCNs under Section 73(1) for FY 2013-14 and 2014-15 instead of issuing further statements. 4.5 The learned Counsel further submits that the demand raised in the SCN....
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....afety (S. No. 1,5,6,7 & 12 of 12th schedule) - exempt 2. Watch and Ward Charges Penal charges to discourage delay in possession, related to land-use regulation and amenities (S. No. 2,5,6,12 & 17 of 12th schedule) - exempt 3. Transfer/Processing Fees Statutory requirement under HIMUDA Act, mere permission for ownership change - not a taxable service 4. Administrative Charges Already taxed as part of deposit works and housing receipts - separate taxation would amount to double levy 5. Conversion Charges Capital receipts for converting leasehold to freehold - outside scope of "service" or alternatively exempt under Entry 39 (S. No. 2 of 12th schedule) 6. Ground Rent Related to residential land, covered under negative list (Section 66D) - not taxable 7. Water Charges Statutory charges for utility services under HIMUDA Act (S. No. 5,6 & 7 of 12th schedule) - exempt as municipal function 8. Lease Deed Charges (HPTA) Mere reimbursement of expenses (stamp duty, printing) - no service involved 9. Map/Technical Approval Fees Regulatory charges for approving building plans-fall under urban planning (S. No. 2 of 12th sche....
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....o service tax and receipts exempt or not covered under service tax. 4.11 The learned Counsel further submits that non-commercial deposit works are fully exempt from service tax under Notification 25/2012-ST; HIMUDA voluntarily offers to pay service tax on commercial works for the FY 2013-14 and FY 2014-15 only; majority of receipts from housing schemes are either exempt, capital in nature or outside the scope of service tax. Accordingly, the demand raised on both these counts is largely unjustified and liable to be reduced significantly. 4.12 The learned Counsel further submits that construction of flats/houses involves land, goods and services and the service tax is only on the service component, not on land or goods. He refers to the provision of Section 67 which provides for valuation of taxable services but does not provide any mechanism for determining the service portion in composite contracts involving sale of land. Further, Service Tax (Determination of Value) Rules, 2006, including Rule 2A, also fail to provide machinery for such cases. He further submits that Notification Nos. 1/2006-ST and 26/2012-ST allowed 75% abatement, but these are not substitutes for statutor....
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....y Ltd. vs. State of Maharashtra [MANU/SC/0063/1970] - Distinction between business corporations and statutory/governmental bodies. * The Housing Board Haryana (supra) - Statutory authorities are not business entities. 4.15 The learned Counsel further submits that HIMUDA is a Governmental Authority and does not fall in the definition of "business entity" under the Act and is not liable to pay service tax under RCM for legal services, therefore, the demand is unsustainable and must be dropped. 4.16 As regards the imposition of penalty, the learned Counsel submits that the Adjudicating Authority has imposed the penalty for the period 2007-08 to 2011-12, 2013-14 and 2014-15 under Section 78 of the Finance Act, 1994 by invoking the extended period alleging fraud, suppression or wilful contravention, whereas, in the present case, HIMUDA is not liable for service tax in the first place for the various reasons as mentioned above. Moreover, HIMUDA was under a bona fide belief that its services were non-taxable, based on legal exemptions and statutory definitions; bona fide conduct negates mala fide intent necessary to invoke penalty under Section 78; further, once a SCN is is....
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....As regards the Statement dated 23.05.2014 issued under Section 73(1A) of the Act, the learned Authorized Representative submits that through the Statement under Section 73(1A) two more services, i.e. industrial or commercial construction services and construction of residential complex services, were added, but the demand may be confirmed only in respect of services which were already part of original SCN. 6. We have considered the rival submissions and also have gone through the documents/judgments/orders referred to during the course of arguments. We note that in the present appeals, following issues are involved for our determination: 1) Whether demand is sustainable when it is not specified under which specific category subject service falls? 2) Whether Revenue can issue Statement U/S 73 (1A) when grounds relied upon for the subsequent period are not the same as are mentioned in the earlier show Cause Notices? 3) Whether HIMUDA, constituted under the Himachal Pradesh Housing Urban Development Authority Act, 2004, is a Governmental Authority? 4) Whether Service tax is leviable on various types of statutory charges received by HIMUDA, as a G....
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....That is not sufficient to proceed against the respondents unless it is shown that they were parties to the arrangements, if any. As no sufficient material much less any material has been placed on record to substantiate the stand of the appellant, the conclusions of the Commissioner as affirmed by the CEGAT cannot be faulted." The demand in the impugned order, therefore, cannot sustain in the light of the law laid down by the Hon'ble Supreme Court." Further, we find that the SCN as well as the impugned OIO fails to establish under which of the alleged taxable categories, the impugned services sought to be taxed, fall and therefore, in view of the law laid down in the case of Shri K. Mayakrishnan (supra), we are of the opinion that this demand cannot be confirmed. 8. Further, as regards the issue no. (2), relating to Statement dated 23.05.2014 issue under Section 73(1A) of the Act for the period 2012-13, we find that the demand was proposed by merely issuing a statement under Section 73(1A) of the Act instead of issuing a proper SCN and the same is not sustainable in law because as per the requirement of Section 73(1A) it is required that the grounds for issuing the s....
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....luation machinery; 75% abatement via notification cannot replace legislative provisions. The said decision of Hon'ble Delhi High Court was followed by this Tribunal in the case of The Housing Board Haryana (supra), wherein the Tribunal has observed as under: "7.4 Further, we find that this issue has been settled by the Hon'ble Delhi High Court in the case of Suresh Kumar Bansal vs. UOI (supra), wherein the Hon'ble High Court has held in para 53 to para 55 as under: "53. As noticed earlier, in the present case, neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components for ascertaining the measure of service tax. The abatement to the extent of 75% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract. 54. Insofar as the challenge to the levy of service tax on taxable services as defined under Section 65(105) (zzzzu) is concerned, we do not find any merit in the contention that there is no element of service involved in the preferential location charges levied by a builder. ....
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.... is not applicable in the present case because the Appellant HIMUDA is a Governmental Authority and does not fall under the definition of 'business entity' and therefore is not liable to pay service tax for legal services under RCM as held by this Tribunal in the case of The Housing Board Haryana (supra). 11. As regards issue no. (8), relating to the invocation of extended period, we find that this Tribunal in the case of The Housing Board Haryana (supra), has considered this issue in details and held as under: "10.1 As regards extended period of limitation, we find that the appellant, which is a governmental authority constituted under the Housing Board Act, 1971, has provided all the information as required by the department. Moreover, being a statutory authority, the appellant is required to maintain proper accounts, which are duly audited by the office of the Accountant General and the audited accounts accompanied by audit report have been forwarded to the State Government as required by the Act. Further, all the figures have been taken from balance sheets. Therefore, in view of this, there is no suppression or fraud with intent to evade the payment of tax. ....