2014 (2) TMI 386 - AT - Service Tax

Duty demand on the land owners shares of construction - revenue was of the view that assesse had not furnished any evidence to establish any difference in specification / quality between the construction provided to the land owners and others - Held that - Assesse failed to produce the evidence in support of their contention and the Commissioner was justified to proceed on the basis of comparable prices Commissioner was justified to proceed on the basis of comparable prices and confirmed the demand accordingly they were eligible for benefit of 67% abatement even the work s contract benefit was denied Assesse had not produced the cost of construction as required under Service Tax (Determination of Value) Rules, 2006. Waiver of pre deposit assesse failed to make out a prima facie case 75lakhs were ordered to be submitted stay granted partly.

Summary

Issues:
1. Waiver of pre-deposit of tax in Appeal No. ST/258/2012 and ST/259/2012.
2. Dispute over service tax demands related to construction projects.
3. Applicability of work's contract benefit and abatement in tax calculation.
4. Evidence submission by the applicant to support contentions.
5. Justification of tax demands based on comparable prices.
6. Prima facie case for waiver of tax, interest, and penalties.

Analysis:

1. The applications sought waiver of pre-deposit of substantial tax amounts in relation to service tax demands for construction projects. The demands were based on Show Cause Notices proposing significant tax liabilities for specific periods.

2. In Appeal No. ST/258/2012, the primary contention was regarding the valuation of land for a specific project, where the applicant argued for a lower valuation based on the joint venture agreement. Another issue involved tax demand on renting immovable property service, disputed due to the basis of calculation.

3. For Appeal No. ST/259/2012, the dispute centered on tax demands related to residential construction services and the denial of work's contract benefit. The applicant claimed to have paid tax under works contract service and challenged the denial of abatement in tax calculation.

4. The applicant's failure to provide sufficient evidence supporting their contentions was highlighted during the proceedings. Lack of documentation regarding determination of prices for residential flats and construction costs impacted the case.

5. The Commissioner justified the tax demands based on comparable prices due to the absence of evidence establishing differences in construction quality for landowners. The issue of eligibility for abatement and work's contract benefit was also addressed, with the Commissioner's findings supporting the tax demands.

6. Ultimately, the Tribunal found that the applicant did not establish a prima facie case for the waiver of the entire tax amount, interest, and penalties. A partial waiver was granted, requiring a specific deposit within a set timeframe, with further pre-deposit waived pending the appeals' resolution.

This detailed analysis covers the various issues raised in the judgment, outlining the arguments presented by both parties and the Tribunal's findings regarding the tax demands and waiver of pre-deposit.