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2019 (3) TMI 120 - AT - Service TaxClassification of service under Construction of Complex Service or Works Contract Composition Scheme - Evasion of duty - Extended period of limitation - Held that - it was concluded that even in case of row houses under the facts and circumstances being more than 12 under one scheme of Rajasthan Housing Board having common water supply, park, community centre thus will qualify under Construction of Residential Complex Service and accordingly held liable to Service Tax. Similarly, construction of Police Quarters for Avas Vikas Ltd. (Government of Rajasthan) was held liable to Service Tax under Construction of Residential Complex Service . So far the Service Tax on construction of park, boundary wall is concerned, we find that the said issue was considered by a coordinate Bench of this Tribunal in M/S KARNI CONSTRUCTION COMPANY VERSUS CCE & ST, JAIPUR I 2018 (6) TMI 803 - CESTAT NEW DELHI where it has been held that work in the nature of construction of boundary wall, construction of rain water drains is not liable to Service Tax as part of residential complex and also does not qualify as facility for the residents of the quarters. Such works in the nature of infrastructure development or external development. Further the said work is also not taxable under Works Contract Service under sub para (b) of para (ii) of sub-clause (2) of the (zza) of section 65 (25) of Finance Act, 1994, as not used for commercial purpose. Appeal allowed with consequential relief.
Issues:
1. Alleged non-payment of service tax by the appellant for construction and rent-a-cab services. 2. Correct classification of services provided and availability of abatement and composition scheme benefits. 3. Imposition of penalties under Sections 76 and 78 of the Act. Analysis: Issue 1: Alleged non-payment of service tax The appellant, a construction company, was accused of not paying service tax amounting to a significant sum for the period between October 2007 and September 2010. The Revenue alleged that the appellant provided construction services to the Rajasthan Housing Board without paying service tax. Additionally, the appellant offered 'Rent-a-Cab Service' to another entity but failed to pay the due service tax. The Revenue also highlighted the appellant's non-filing of ST-3 returns, emphasizing the audit's role in uncovering these discrepancies. Issue 2: Correct classification and benefits The adjudicating authority confirmed the demand and made several findings. It classified the services provided to the Rajasthan Housing Board under 'Works Contract' service, making them taxable. The authority also deemed the services provided to Avas Vikas Limited for construction of Police Quarters as taxable. It concluded that the appellant was not eligible for abatement benefits under specific notifications and that the composition scheme for payment of service tax was inapplicable. Moreover, the authority held that the appellant was liable to pay service tax for the Rent-a-Cab Service provided. Issue 3: Imposition of penalties Penalties were imposed under Sections 76 and 78 of the Act. However, upon hearing the parties, the counsel argued against the findings, particularly concerning the classification of services. The counsel cited legal precedents to support the appellant's position. Ultimately, the Tribunal set aside the demand confirmed under 'Construction of Residential Complex Service,' along with the penalties imposed under Sections 76 and 78 of the Act. The appeal was allowed, granting consequential relief to the appellant. This detailed analysis of the legal judgment provides a comprehensive overview of the issues involved and the Tribunal's decision on each aspect of the case.
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