2009 (3) TMI 115 - AT - Service Tax

Construction of commercial and residential apartments / buildings - Revenue proceeded against them on the ground that they have evaded payment of Service Tax on the services rendered by them to their customers in the category of Commercial or industrial Construction Services and Construction of Complexes (Residential) Services during the period 16-6-2005 to 30-6-2006 and the above - the applicants had already discharged the Service Tax liability in part during investigation which has been appropriated stay granted to the balance amount.

Summary

Issues Involved:
1. Requirement of pre-deposit by the applicants for Service Tax, interest, and penalties.
2. Allegation of evasion of Service Tax on construction services.
3. Appropriation of deposited amounts by the applicants.
4. Interpretation of Board's Circular on service tax liability for construction services.
5. Consideration of commercial property in the service tax liability issue.

Analysis:
1. The judgment addresses the requirement of pre-deposit by the applicants for Service Tax, interest, and penalties related to the services provided by them in the construction sector. The Revenue alleged that the applicants evaded payment of Service Tax on services rendered in the category of "Commercial or industrial Construction Services" and "Construction of Complexes (Residential) Services". The demands were confirmed, leading to the need for pre-deposit as per the impugned order.

2. The learned Advocate representing the applicants highlighted that certain amounts had already been deposited by the applicants, which were appropriated by the authorities. The deposited amounts in the cases of M/s. Classic Promoters and Developers, as well as M/s. Classic Property, were specified. This appropriation was a crucial aspect considered in the judgment.

3. The Tribunal delved into the interpretation of the Board's Circular, specifically Circular No.108/02/2009-S.T., dated 29-1-2009, to analyze the service tax liability concerning construction services. The Circular outlined scenarios where service tax would not be applicable, such as in cases of 'self-service' until the execution of a sale deed transferring ownership. The judgment extensively quoted and analyzed the Circular to determine the applicability of service tax in the present case.

4. A significant point raised during the proceedings was the consideration of commercial property in the service tax liability issue. The learned JCDR argued that the Board's Circular might not entirely cover the commercial property aspect, suggesting a broader scope of analysis. However, the Tribunal, after careful consideration and taking into account the amounts already deposited and the Circular's provisions, ordered a complete waiver of the remaining dues demanded in the impugned order. The Stay Order was to continue without coercive measures by Revenue until the appeal's disposal.

5. In conclusion, the judgment provided a detailed analysis of the issues surrounding the pre-deposit requirement, alleged evasion of Service Tax, appropriation of deposited amounts, interpretation of the Board's Circular on service tax liability for construction services, and the consideration of commercial property in the service tax liability matter. The decision to waive the balance amount of dues demanded highlighted the Tribunal's adherence to legal provisions and precedents in resolving the case.