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2018 (7) TMI 1121 - AT - Service TaxScope of SCN - whether Service Tax can be fastened on the appellant/assessee under the Classification not Proposed in the Show Cause Notice? - whether the demand of Service Tax under the Category of Construction of Residential Complex for construction of single-storey residential units is tenable? - Held that - It is found from the perusal of Show Cause Notice that there is no alternate proposal to Classify under the category of Commercial or Industrial Construction Services and as such, this demand to be denied beyond the scope of SCN - demand set aside. Levy of Service Tax on meditation centre and library building constructed for Gautam Buddha University - Commercial or Industrial Construction Services or not? - Held that - This demand is also beyond the scope of SCN, as there was no proposal to levy Tax under the Category of CICS - Further also, as the Construction of Library and Meditation Centre is neither residential nor for commercial purpose. Hence, the same is not taxable even under the Category of CICS - demand set aside. Penalties are also set aside. Appeal allowed - decided in favor of appellant.
Issues: Classification for Service Tax, Fastening of Service Tax under different categories, Scope of Show Cause Notice
The judgment dealt with multiple issues related to the classification for Service Tax and the scope of the Show Cause Notice. The first issue involved the classification of Service Tax on the construction of a boundary wall for a development authority. The appellant did not contest this issue. The second issue concerned the levy of Service Tax on the construction of an industrial building at a specific location. The appellant argued that the industrial construction did not fall under the category of "Construction of Residential Complex," and there was no proposal in the Show Cause Notice to classify it under "Commercial or Industrial Construction Services." The Tribunal agreed with the appellant, noting that the demand was beyond the scope of the Show Cause Notice, and thus set it aside. Another demand was related to the construction of single-storey flats/houses during a specific period for a principal sector. The appellant argued that each building was a single-storey structure and relied on a previous ruling stating that Service Tax under the category of "Construction of Residential Complex Services" applies only when each building block has more than 12 units with common facilities. The Tribunal allowed this ground and set aside the demand for Service Tax in this regard. The next issue involved the levy of Service Tax on a meditation center and library building constructed for a university. The demand was made under the category of "Commercial or Industrial Construction Services," although there was no proposal in the Show Cause Notice for this classification. The Tribunal found that the construction was neither residential nor for commercial purposes, and thus not taxable even under the category of Commercial or Industrial Construction Services. Consequently, the demand was deleted. In conclusion, the Tribunal also deleted all penalties imposed under relevant sections of the Finance Act, 1994. The appeal was allowed, and the impugned orders were modified accordingly. The judgment provided a detailed analysis of each issue, emphasizing the importance of adherence to the scope of the Show Cause Notice in determining the applicability of Service Tax classifications.
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