2016 (10) TMI 959 - AT - Service Tax

Construction of individual residential units - demand of service tax services on the ground that the service would fall under the category of construction of residential complex services - extended period of limitation - suppression of facts - Held that - extended period would be available to the Revenue where the assessee suppressed or mis-stated any information, with an intent to evade payment of duty. In the present case, there is no such evidence on record and has rightly been observed by Commissioner (Appeals) that the entire facts along with remuneration received being a part of the balance sheet which is a public document, no allegation of suppression can be made against the assessee - the issue of limitation also set aside by observing that the assessee were under bonafide belief that they were not liable to pay service tax on construction of residential complex services as many of the other identical contractors engaged in identical services of Rajasthan Housing Board were not paying any Service tax. This fact is sufficient for upholding the assessees stand of bonafide belief. Balance sheet of company is a publically available document and therefore, the allegation that data stated in the balance sheet was suppressed from the department is not viable allegation and as such, demand is to fail on the ground of limitation itself. Demand not sustainable - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the services provided by the appellants fall under the category of 'construction of residential complex' services, attracting service tax liability.
2. Whether the demand raised against the appellants is within the period of limitation.
3. Whether the Revenue is justified in appealing the decision of the appellate authority.

Analysis:

1. The appellants provided construction and complex services to various entities, including the Rajasthan Housing Board. The Revenue initiated proceedings against them, alleging that these services fell under 'construction of residential complex' services, necessitating service tax liability. The demand was contested by the assessee, arguing that they were engaged in constructing individual residential units, not a residential complex. They relied on a Tribunal decision and contested the demand on the grounds of limitation. The original authority confirmed the demand, but the appellate authority set it aside, noting the bonafide belief of the assessee and lack of suppression of information.

2. The appellate authority observed that the demand was raised based on information from the balance sheet, a public document. They held that no suppression could be alleged against the assessee, as the balance sheet data was publicly available. The extended period for Revenue action requires evidence of suppression, which was lacking in this case. The appellate authority rejected the Revenue's appeal, stating that no justifiable reason existed to interfere with the decision.

3. The Tribunal upheld the appellate authority's decision, emphasizing the lack of evidence of suppression by the assessee. The Revenue's appeal was dismissed, highlighting that the balance sheet information was not suppressed and was publicly available. The Tribunal concluded that the Revenue had no valid reason to challenge the decision, thereby rejecting the appeal.