TaxTMI 
TaxTMI 
2025 (12) TMI 8
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.... GST & Central Excise, Thane, Mumbai, in adjudication of the show cause proceedings initiated against M/s CCI Projects Private Limited, Mumbai (herein after, referred to as "the respondent" for short). 2.1 The brief facts of the case are that the respondent M/s CCI Project Private Limited, Mumbai herein are inter alia, engaged in the business of providing services of construction of residential complex. For the purpose of payment of service tax on taxable output services and for compliance with the Service Tax statute, they are registered with the jurisdictional Commissionerate under service tax registration No. AABCT4694BST001. 2.2 During the disputed period from 2012-13 to 2016-17, the respondent had entered into an agreement dated 26.03.2009 with M/s Cable Corporation of India Limited (CCIL) wherein they were appointed as the Chief Project Manager and co-ordinator for the development, supervision and construction of multi-storeyed residential complex and other structures of mixed use on the land belonging to CCIL. In terms of the said agreement, the respondent had provided the services of construction of residential dwellings to the flat buyers. The conveyance deed of the ....
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....pose. He submitted that on combined reading of the above agreements, it would appear that CCIL outsourced the entire work of construction and sale of flats; and the service provided by the respondent in this context, would be considered as 'provision of service on behalf of the client (CCIL) and the entire consideration received by the respondent from the flat buyers would be liable to service tax as per Section 65 (19) of the Finance Act, 1994. 3.2 He further claimed that payment of service tax by the respondent for an amount of Rs.29,11,01,366/- towards 'construction services' without availing CENVAT facility enabled them to avail the abatement provided under Notification No. 26/2012-S.T. dated 20.06.2012; whereas they are required to discharge the entire service tax liability Rs.71,88,65,982/- without any abatement. Hence, he prayed that the impugned order be set aside and the appeal filed by the department be allowed. 4.1 Learned Senior Advoate appearing for the respondent submitted that the respondent has provided the services of construction of residential complex to the flat buyers. In the impugned transaction, M/s CCIL is engaged in sale of land to the flat purc....
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....39) S.T.R. 913 (SC) (ii) Vasantha Green Projects Vs. Commissioner of Central Tax, GST, Ranga Reddy - 2019 (20) G.S.T.L. 568 (Tri.-Hyd.) (iii) DLF Commercial Projects Corporations Vs. Commissioner of Service Tax, Gurugram - 2019 (27) G.S.T.L. 712 (Tri.-Chan.) 5. Heard both sides and perused the case records along with paper books and case law citations submitted in this case. 6. In the impugned order dated 22.10.2018, learned Commissioner had examined the issues under dispute and had recorded his findings as follows: "5.18 The amount being Rs.7,26,11,77,466/- which was billed for the sales of the flats was thus assessed to service tax (Table at the end of Para 5.8 above refers). Out of the said total amount, an amount of Rs.6,78,01,79,079/- was received by the noticee during entire period of demand notice. Out of this received amount, an amount of Rs.5,33,44,55,359/- was retained by the noticee. The demand notice has been raised for this amount of Rs. 5,33,44,55,359/-. Since the entire amount billed for selling of flats Rs.7,26,11,77,466/- has already been subjected to service tax and an amount of Rs.29,11,01,366/- was paid by the noticee towards ser....
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....tion Certificates from the government authorities for sale of the flats to the buyers, including assisting the buyers in formation of society and transfer of title after completion of the project. In providing such service, the agreed upon consideration have also been mentioned as 50%/66.66% of gross sale proceeds. Therefore, we find that the respondent had acted as per the said agreement while retaining the amount in respect of the services provided by them and paid applicable service tax. We also find that accounting of the entire gross receipts in respect of the sale of the flats also fulfils one of the condition set forth in the exemption entry No.12 of Notification No.26/2012-S.T. dated 26.06.2012, along with non-availment of CENVAT credit facility. Since, the respondent had fulfilled both the requisite conditions and have paid service tax on the amount retained by them, we do not find any infirmity in the findings arrived at by the learned Commissioner in the impugned order concluding that the respondent had duly discharged the entire service tax liability and further holding that demand of service tax on the respondent is not sustainable, for dropping the proposals made in t....
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....ct. This being the case, we feel that the learned counsel for the assessees are on firm ground when they state that the service tax charging section itself must lay down with specificity that the levy of service tax can only be on works contracts, and the measure of tax can only be on that portion of works contracts which contain a service element which is to be derived from the gross amount charged for the works contract less the value of property in goods transferred in the execution of the works contract. This not having been done by the Finance Act, 1994, it is clear that any charge to tax under the five heads in Section 65(105) noticed above would only be of service contracts simpliciter and not composite indivisible works contracts. 16. At this stage, it is important to note the scheme of taxation under our Constitution. In the lists contained in the 7th Schedule to the Constitution, taxation entries are to be found only in lists I and II. This is for the reason that in our Constitutional scheme, taxation powers of the Centre and the States are mutually exclusive. There is no concurrent power of taxation. This being the case, the moment the levy contained in a taxing....
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....acts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract. xxx xxx xxx xxx 41. We are afraid that there are several errors in this paragraph. The High Court first correctly holds that in the case of composite works contracts, the service elements should be bifurcated, ascertained and then taxed. The finding that this has, in fact, been done by the Finance Act, 1994 Act is wholly incorrect as it ignores the second Gannon Dunkerley decision of this Court. Further, the finding that Section 67 of the Finance Act, which speaks of "gross amount charged", only speaks of the "gross amount charged" for service provided and not the gross amount of the works contract as a whole from which various deductions have to be made to arrive at the service element in the said contract. We find therefore that this judgment is wholly incorrect in its conclusion that the Finance Act, 1994 contains both the charge and machinery for levy and assessment of service tax on indivisible works contracts. 42. It remains to consider the argument of Shri Radhak....
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....ions are in force till today and has not been withdrawn by the Board. As already detailed herein above, the appellant has discharged the service tax liability on the gross amount charged i.e. consideration received from land owners in the form of kind other than cash (value of the land/development rights) + consideration received from prospective buyers in cash by way of financial arrangements on the construction services undertaken by the appellant on joint development basis. We also note that appellant had declared the same in the books of account like IT returns and ST-3 returns which has been certified by Chartered Accountant wherein it is stated that service tax compliance is towards the payment of gross amount of the construction undertaken on joint development basis and received from the customers has been made. This leads to conclusion that it is evident that appellant has complied with the service tax liability on the construction undertaken on joint development basis on the value of construction which is mandated in Section 67 of Finance Act, 1994, read with rules made thereunder. In our view, if once the service tax liability has been discharged on the gross amount, dema....
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...., benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth." If, therefore, any benefit arises out of the land, then it is immovable peruperty. Considering Section 10 of the Specific Relief Act, such a benefit can be specifically enforced unless the respondents establish the compensation in money would be an adequate relief. Can FSI/TDR be said to be a benefit arising from the land. Before answering that issue we may refer to some judgments for that purpose. In Sikandar and Ors. v. Bahadur and Ors. 27 ILR 462 a Division Bench of the Allahabad High Court held that right to collect market dues upon a given piece of land is a benefit arising out of land within the meaning of Section 3 of the India Registration Act, 1877. A lease, therefore, of such right for a period of more than one year must be made by resitered instrument. A Division Bench of the Oudh High Court in Ram Jiawan and Anr. v. Hanuman Prasad and Ors. AIR 1940 Oud 409 also held, that bazaar dues, constitute a benefit arising out of the land and therefore a lease of bazaar dues is a lease of immovable Allahabad High Court in Smt. Dropadi Devi v. Ram....
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....land within the meaning of section 3 of the Indian Registration Act, 1877. A lease, therefore, of such right for a period of more than one year must be made by registered instrument. A Division Bench of the Oudh High Court in Ram Jiawan and anr. v. Hanuman Prasad and ors., AIR 1940 Oudh 409 also held, that bazaar dues, constitute a benefit arising out of the land and therefore a lease of bazaar dues is a lease of immovable property. A similar view has been taken by another Division Bench of the Allahabad High Court in Smt. Dropadi Devi v. Ram Das and ors., AIR 1974 Allahabad 473 on a consideration of section 3(26) of General Clauses Act. From these judgments what appears is that a benefit arising from the land is immovable property. FSI/TDR being a benefit arising from the land, consequently must be held to be immovable property and an Agreement for use of TDR consequently can be specifically enforced, unless it is established that compensation in money would be an adequate relief." 6. The Division Bench has held that since TDR is a benefit arising from the land, the same would be immoveable property and therefore, an agreement for use of TDR can be specifically enforced. ....