TaxTMI 
TaxTMI 
2025 (11) TMI 1705
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.... the total demand was confirmed along with equal penalty. Appellants had filed an appeal against the said Order-in-Original as appeal no. ST/26627/2013, wherein, vide Final Order No. 26885/2013 dated 31.10.2013 remanded back the case. The Adjudicating Authority extended the Works Contract Composition Scheme and confirmed the demand to the extent of Rs. 1,60,75,412/- and dropped an amount of Rs. 3,50,06,520/- 3. The Learned Counsel for the appellant submits that the demand of Service Tax in respect of construction of residential complex service is not sustainable for the following reasons: (a) The Adjudicating order in the impugned order dated 14.03.2014 referring to the earlier order 30.01.2013 is not correct. The Hon'ble Tribunal set aside the said order dated 30.01.2013 and referring to non-existing order and not considering the submissions made by the Appellant is not maintainable. (b) Construction of residential apartment is not liable to service tax as per the definition of the term 'residential complex' under Section 65(91a) of the Finance Act, 1994. Such construction is not liable to tax prior to 01.07.2010 i.e., prior to insertion of explanation to Sect....
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....uj)]. 7. Learned Counsel for the appellant also submits that the demand was confirmed for the period beyond limitation in a case wherein tax was paid by the appellant prior to 01.07.2010, though not required and in a case involving interpretation of legal issue of taxability on construction of complex, it is a settled legal position that when issue involves difference in interpretation, extended period cannot be invoked. He relied on the following decisions in this regard: (a) ITW Signode India Ltd Vs Collector of Central Excise (2004) 3 SCC 48. (b) Nulsi Neville Wadia Vs Ivory Properties & others 2019 (10) TMI 1314-Supreme Court. 8. Learned Counsel for the appellant submits regarding the Department appeal that extending composition scheme without opting for the same is not correct. Learned Counsel for the appellant on this issue relied on the following case laws: (a) Commissioner of Customs, Central Excise & Serive Tax, Visakhapatnam - I Vs M/s Pragati Edifice Pvt Ltd., (Vice-Versa) [2019 (9) TMI 792 - CESTAT Hyderabad]. (b) NCC Ltd., Vs Commissioner of Central Tax, Hyderabad - GST [2023 (10) TMI 590 - CESTAT Hyderabad]. 9. Learned Coun....
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....sition rate after following the decisions of this Bench viz- M/s Pragati Edifice Pvt Ltd., supra & NCC Ltd., supra, in which it was held that even without opting the Composition Scheme, the same is permitted. Therefore, there is no illegality regarding this issue. Hyderabad Bench in the case of M/s Pragati Edifice Pvt Ltd., in this regard held that "the assessee has the option of paying service tax under the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007, if he chooses to do so. The mere fact that they have not opted for this earlier does not reduce their entitlement to opt for this scheme now. The demand of service tax needs to be recomputed as above, after following principles of natural justice and giving the assessee an opportunity to present their case including, indicating if they desire to avail the benefit of composition scheme". The Department's appeal has no force and is liable to be dismissed. Confirmation of demand prior to 1.7.2010 15. It is the submission of the learned counsel for the appellant that section 65 (105) (zzzh) read with section 65 (91a) of the Finance Act, 1994 levied service tax on construction of residential complexes.....
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....nd the demand to this extent needs to be set aside". 17. This submission of the assessee appellant deserves to be accepted because of the explicit legal position and the ratio of the precedent decisions. Therefore, the demand of service tax for services rendered before 1.7.2010 deserves to be set aside. Confirmation of demand on that portion of the services which were rendered as per individual contracts 18. It is the submission of the learned counsel that the appellant had built and sold semi-finished residential complexes to buyers under a sale deed. Thereafter, it entered into individual contracts to complete the construction and finish the flats as per the requirements and desire of the individual flat owners. All construction and completion work done as per the contracts with individual buyers was fully exempt as per section 65 (91a) of the Finance Act, 1994 which reads as follows: (91a) "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 services such as park, lift, parking space, community hall,....
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....tice under section 73 of the Finance Act, 1994. This remedy itself is subject to some limitations including the limitation of time within which the SCN can be issued. During the relevant period, the time was 18 months. However, if there were some aggravating factors, an extended period of limitation of five years is prescribed. These factors are that the non-levy, non-payment, short levy or short payment of service tax is due to: (a) Fraud; or (b) Collusion; or (c) Wilful mis-statement; or (d) Suppression of facts; or (e) violation of provisions of Act or Rules with an intent to evade payment of service tax 22. The reasons for invoking extended period of limitation in para 8 of the SCN are that the appellant had undertaken 'works contract service', received payments from prospective customers and wrongly classified the services under 'construction of residential complex' service in their half yearly ST-3 returns and thereby failed to pay tax. It is further stated that these facts came to light only during the investigation and therefore, extended period of limitation was invocable. In the impugned order, the Commissioner did not recor....