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2019 (5) TMI 76 - AT - Service TaxTaxability - Construction of residential complexes - CBEC in its circular No. 151/2/2012-ST dated 10.02.2012 - HELD THAT - The issue of taxability on construction of residential complexes service prior to 01.07.2010 is no longer res integra and has been settled in the case of KOLLA DEVELOPERS BUILDERS VERSUS CCCE ST, HYDERABAD-II 2018 (11) TMI 164 - CESTAT HYDERABAD by the Tribunal - CBEC has also clarified that prior to 01.07.2010 no service tax is chargeable on such services - the demand of service tax for the period prior to 01.07.2010 needs to be set aside. Period post 01.07.2010 - HELD THAT - The appellant submits that they have already discharged service tax for this period and had filed ST-3 returns. In view of the above, the demand for service tax for the period prior to 01.07.2010 is set aside and the demand for service tax post 01.07.2010 is confirmed which according to the learned counsel for the appellant has already been discharged. Penalty - HELD THAT - As the demand in respect of the most of the period is set aside and service tax has already been paid in respect of the remaining period, there is no case to impose penalty under Sec.77 78 of the Finance Act, 1994 - Penalties set aside. Appeal allowed - decided in favor of appellant.
Issues:
1. Taxability of construction of residential complexes service prior to 01.07.2010. 2. Demand of service tax for the period post 01.07.2010. 3. Imposition of penalties under Sec.77 & 78 of the Finance Act, 1994. Issue 1: Taxability of construction of residential complexes service prior to 01.07.2010 The appellant, engaged in construction of residential complexes, faced a demand for service tax under three heads in the show cause notice. The Tribunal considered the issue of taxability of this service prior to 01.07.2010, citing relevant circulars and previous judgments. Referring to Circular No. 151/2/2012-ST and the case of Kolla Developers and Builders, the Tribunal held that no service tax is chargeable on such services before 01.07.2010. Relying on precedents and clarifications, the demand of service tax for the period prior to 01.07.2010 was set aside by the Tribunal. Issue 2: Demand of service tax for the period post 01.07.2010 Regarding the period post 01.07.2010, the appellant claimed to have already discharged the service tax liability and submitted ST-3 returns as evidence. The Tribunal acknowledged the payment for this period and confirmed the demand for service tax post 01.07.2010. As the appellant had paid the tax for the remaining period and the demand was set aside for most of the period, the Tribunal found no grounds to impose penalties under Sec.77 & 78 of the Finance Act, 1994. Consequently, the penalties were set aside by the Tribunal under Sec.80. Issue 3: Imposition of penalties under Sec.77 & 78 of the Finance Act, 1994 In exercising its powers under Sec.80, the Tribunal set aside the penalties imposed upon the appellant as the demand for service tax for the period prior to 01.07.2010 was rejected, and the tax for the post 01.07.2010 period had already been paid. The Tribunal concluded the appeal by disposing of the case in line with the above decisions and considerations, thereby providing relief to the appellant from the penalties imposed under Sec.77 & 78 of the Finance Act, 1994. This detailed analysis of the judgment highlights the Tribunal's decision on the taxability of construction services, the demand for service tax for different periods, and the imposition of penalties, providing a comprehensive overview of the legal issues addressed in the case.
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