2024 (6) TMI 1521

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....ffect from 27.04.2005. 2. The brief facts of the case are service tax is levied on 'Construction of Complex Service' with effect from 16th June 2005. The Board vide Circular No. 80/10/2004 dated 17.09.2004 clarified that the estate builders, who construct buildings/premises for themselves (for their own use, renting it out or for subsequent sale thereof) are not covered under the ambit of 'Construction Services'. The appellant contended that; on the basis of the Circular they entertained a belief that the service tax is not applicable to them as they are building flats themselves for subsequent sale; the doubt involved was whether the builder per se is a service provider; whether they are liable to pay service tax merely because they hav....

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....s of the Board and requested to drop the penal proceedings. 4. The proposals in the show cause notice for demand of service tax along with interest was confirmed and the adjudicating authority dropped the penalties proposed under Sections 76, 77 & 78 of the Finance Act, 1994 on the following grounds: a) There was no intention on the part of the appellant to suppress the value of service and to evade the tax, if that were to be their intention, they would not have paid the service tax with interest and would have contested the same. b) The delay in non-payment of service tax was due to the confusion and doubt on applicability of service tax on real estate developers/builders in initial days. c) The confusion app....

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....he appellant is registered under the Service Tax in 2005, before the 'Construction of Complex Services' were brought under service tax. The appellant has contended that; as there was no clarity with respect to service tax payable on 'Construction of Complex Services', especially when such construction is undertaken for themselves and the constructed flats were sold after they are completed; the Board Circular also had not given them clarity with regard to payment of service tax on their activity; the Service Tax officials have visited them and have informed them about the liability to pay service tax and they have paid the service tax along with interest; subsequently, the Department has issued a show cause notice proposing demand and appro....