2018 (2) TMI 724 - AT - Central Excise

Construction of Residential Complex Services - difference in figures in profit and loss account and the figure in ST-3 return - Held that - the demand cannot be raised on the basis of comparisons of ST-3 Returns and Profit & Loss Account, without there being any other independent corroborative evidence - appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand of service tax under 'Construction of Residential Complex Services' for the period 05/06/2005 to 31/03/2009 based on ST-3 Returns and Profit & Loss Account figures.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Allahabad dealt with the confirmation of a demand of service tax amounting to ?67,20,597 against the appellant for the period from 05/06/2005 to 31/03/2009 under the category of 'Construction of Residential Complex Services.' The Revenue initiated proceedings due to discrepancies between the gross receipts in the profit and loss account and the value of services declared in the service tax return. The appellant argued that certain receipts were not taxable as no services were rendered, and there were differences due to the timing of revenue recognition and service tax payment. Additionally, they claimed that certain amounts were not liable for service tax, such as pre-15/06/2005 receipts and sales of shops. The appellant also contended that they were not liable for service tax as they were constructing individual row-houses, not residential complexes. The Tribunal considered the appellant's arguments and the decision in Macro Marvel Projects Ltd. v. Commissioner of Service Tax, Chennai, and found merit in the appellant's contentions. The Tribunal also noted that the entire consideration received by the appellant had been charged to service tax, further supporting the appellant's case. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.