2008 (11) TMI 588 - AT - Service Tax

Pre-deposit - stay/dispensation of pre-deposit - Held that - Even the information on the break-up of the value relating to commercial complexes and residential complexes are not available. In these circumstances, we are of the view that the appellant should be put to terms.

Summary

Issues:
1. Amounts due for the years 2003-04, 2004-05 on account of construction activity.
2. Demand of Service Tax on account of enhancement of the value considering the land value.

Analysis:

Issue 1: Amounts due for the years 2003-04, 2004-05 on account of construction activity:
The appellant, a developer, argued that they are not liable for Service Tax as they are not providing any service, and the works contract became taxable only from June 1, 2007. The appellant cited favorable decisions like Magus Construction Pvt. Ltd. v. UOI, emphasizing that construction activities for self-use do not constitute taxable services. However, the Special Counsel contended that the appellant's case is different as they construct both residential and commercial complexes, and the details now presented were not available earlier. The Commissioner's Order-in-Original highlighted the taxability of services related to construction of complexes under Section 65(105) (zzzh). The Special Counsel suggested a remand for further examination.

Issue 2: Demand of Service Tax on account of enhancement of the value considering the land value:
The Tribunal acknowledged the complexity of the case and the lack of specific information on the value breakup between commercial and residential complexes. Considering the decision in Magus Construction Pvt. Ltd., the Tribunal ordered the appellant to pre-deposit Rs. 10,00,000 within three months, with the remaining Service Tax, penalties, and interest waived until the appeal's disposal. The appeal was scheduled for compliance reporting on February 16, 2009, and final hearing on March 16, 2009.

In conclusion, the Tribunal directed the appellant to pre-deposit a specific amount pending further examination of the case, considering the legal precedents and complexities involved. The decision balanced the appellant's concerns with the tax authorities' assertions, aiming for a fair resolution pending additional information and analysis.