2014 (12) TMI 1045 - AT - Service Tax

Construction of commercial complex - Appellants entered into joint development agreement with land owners, constructed commercial complex of their portion and sold the property on the basis of Power of Attorney executed in their favour by the landowners - Held that - IT is not a case of self-service - Appellants have clearly provided service to the landowners No infirmity in the demand Order of the Commissioner (A) requiring the appellant to deposit the entire amount of service tax adjudicated is reasonable and does not require interference. However, in the interest of justice, we give another opportunity to the appellant to deposit the amount ordered by the Commissioner (A) within 10 weeks - Matter remanded back - Decided partly in favour of assessee.

Summary

Issues:
1. Non-compliance with stay order passed by Commissioner (A) leading to appeal rejection.
2. Service tax liability on an estate developer for construction services provided.
3. Prima facie case for waiver of pre-deposit amount ordered by Commissioner (A).

Issue 1:
The judgment highlights that the appeal was initially rejected due to non-compliance with the stay order issued by the Commissioner (A). However, upon further review, it was determined that the appeal itself could be decided without the need for compliance with the stay order. Consequently, the appeal was taken up for final decision.

Issue 2:
The appellant, an estate developer engaged in property development, was registered for providing construction services. The appellant constructed a commercial complex named 'Mid Town' before the introduction of service tax on commercial and industrial construction. The terms of the joint development agreement outlined the sharing of the constructed area and land between the landowners and the appellant. The appellant provided services to the landowners of 'Mid Town' and received consideration for the construction work. The judgment emphasized that the appellant's actions constituted service provision to the landowners, and the argument of self-service was dismissed based on relevant case law.

Issue 3:
Regarding the pre-deposit amount ordered by the Commissioner (A), the judgment noted that the entire demand against the appellant was set at Rs. 37,60,244. Despite the lack of a prima facie case against the appellant, the Commissioner (A) directed the appellant to deposit the entire service tax amount. The Tribunal found this direction reasonable but granted the appellant an opportunity to comply with the deposit order within 10 weeks. Upon compliance, the Commissioner (A) was instructed to review the issue and make a decision based on merits, allowing the appellants a fair chance to present their case. The judgment also addressed the disposal of early hearing applications.

In conclusion, the judgment addressed issues related to compliance with stay orders, service tax liability on construction services, and the pre-deposit amount ordered by the Commissioner (A), providing detailed analysis and directions for further proceedings in the case.