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2019 (5) TMI 371 - AT - Service TaxNon-payment/ short-payment of service tax - construction of residential and commercial complex services - composite contract. Demands made under category of CICS / CCS - HELD THAT - The demands in these impugned orders which relate to composite contract will not be liable to service tax prior to 1.6.2007 by virtue of the Apex Court judgement in COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT and even for the period post-1.6.2017 as held in REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI - demand do not sustain. Demand made under MMRS - HELD THAT - The amount received from buyers which would be passed on to the owner s association formed, will not be consideration for any service - demand do not sustain. Demand made under RIPS - Period Post-01.06.2007 (June 2007 to March 2008) - HELD THAT - Matter remanded to the original authority to substantiate their claim that they are entitled to avail cenvat credit of service tax paid by the owners of the property. Demands made under CICS / CCS - Period Post-01.06.2007 - HELD THAT - The demands relating to composite works contract along with interest for the period 2008-09 cannot sustain in view of this Bench decision in REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI and same will require to be set aside - Although there is an allegation that appellants have wrongly adjusted excess service tax paid, it has been clarified by the appellants that they have not adjusted any excess service tax paid by them, rather, they have not paid service tax on the amounts received during the period from May 2008 to March 2009 as these amounts have been appropriated towards cost of the land sold - The allegation of the department that irregular adjustment has been done by the appellants fails to convince us. Demands made under CICS / CCS - denial of abatement on the ground that the appellant had availed cenvat credit - HELD THAT - The demands relating to composite works contract along with interest for the period 2009-10 to 2011-2012 cannot sustain in view of this Bench decision in REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI and same will require to be set aside. Demand relating to composite works contract along with interest - HELD THAT - The aforesaid demands relating to composite works contract along with interest for the period 10.09.2004 to 30.04.2007 cannot sustain in view of this Bench decision in REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI and same will require to be set aside. Demand ₹ 24,09,527/- with interest under MMRS on the amount collected as corpus fund - Period April 2007 - HELD THAT - Such amount received from buyers which would be passed on to the owner s association formed, will not be consideration for any service - demand do not sustain. Appeals disposed off.
Issues Involved:
1. Demand under Commercial or Industrial Construction Service (CICS) 2. Demand under Renting of Immovable Property Service (RIPS) 3. Demand under Management, Maintenance, and Repair Service (MMRS) 4. Demand under Construction of Residential Complex Service (CCS) 5. Alleged adjustment of excess service tax paid 6. Interest calculation on delayed payment of service tax 7. Demand related to reimbursable expenses for electricity, water, diesel, etc. 8. Demand under Works Contract Service (WCS) Issue-wise Detailed Analysis: 1. Demand under Commercial or Industrial Construction Service (CICS): - Appeal ST/258/2012: The demand of ?94,62,842/- under CICS was found unsustainable for composite contracts involving transfer of property in goods prior to the introduction of Works Contracts Service. This decision aligns with the Supreme Court's ruling in L&T Ltd. and the Tribunal's decision in Real Value Promoters Pvt. Ltd. - Appeal ST/259/2012: Demands of ?59,08,138/-, ?7,39,011/-, and ?61,04,851/- under CICS were similarly found unsustainable for composite works contracts, following the same legal precedents. - Appeal ST/40901/2014: Demands of ?9,20,20,954/-, ?3,14,06,336/-, ?93,38,878/-, ?2,66,03,013/-, and ?77,28,508/- under CICS were also set aside for the same reasons. - Appeal ST/1/2012: Demands of ?8,67,749/- and ?66,363/- under CICS were similarly dismissed. 2. Demand under Renting of Immovable Property Service (RIPS): - Appeal ST/258/2012: The demand of ?11,68,534/- was remanded to the original authority to verify the appellant's claim for availing cenvat credit of service tax paid by the property owners. - Appeal ST/40901/2014: The demand of ?2,01,305/- under RIPS was upheld as the grounds for the demand were found clear and justified. 3. Demand under Management, Maintenance, and Repair Service (MMRS): - Appeal ST/258/2012: The demand of ?7,32,183/- was set aside as the amounts received from buyers were to be passed on to the owner's association, hence not considered as consideration for service. This decision was supported by case laws such as Vijayashanti Builders Ltd. vs. CST. - Appeal ST/40901/2014: The demand of ?16,19,255/- for reimbursable expenses was set aside, following the Supreme Court's judgment in UOI vs. Intercontinental Consultants and Technocrats Pvt. Ltd. - Appeal ST/1/2012: The demand of ?24,09,527/- for amounts collected as a corpus fund was similarly dismissed. 4. Demand under Construction of Residential Complex Service (CCS): - Appeal ST/258/2012: The demand of ?5,18,152/- was found unsustainable for composite works contracts, following the same legal precedents. - Appeal ST/259/2012: Demands of ?1,06,22,800/- and ?3,45,27,514/- under CCS were similarly found unsustainable. - Appeal ST/40901/2014: The demand of ?43,49,793/- was set aside for the same reasons. - Appeal ST/1/2012: Demands of ?41,65,692/-, ?12,26,638/-, ?33,75,598/-, and ?10,11,386/- under CCS were similarly dismissed. 5. Alleged Adjustment of Excess Service Tax Paid: - Appeal ST/259/2012: The allegation of irregular adjustment of excess service tax paid was found unconvincing as the appellants clarified that they had not adjusted any excess service tax but had not paid service tax on amounts appropriated towards the cost of land sold. 6. Interest Calculation on Delayed Payment of Service Tax: - Appeal ST/40901/2014: The interest liability of ?57,41,432/- and ?33,54,564/- was remanded for re-quantification due to errors in computation. Penalties related to this demand were set aside. - Appeal ST/1/2012: The demand of ?1,07,419/- for short payment of interest was upheld. 7. Demand Related to Reimbursable Expenses for Electricity, Water, Diesel, etc.: - Appeal ST/40901/2014: The demand of ?16,19,255/- was set aside as these amounts were reimbursed by clients, following the Supreme Court's judgment in Intercontinental Consultants and Technocrats. 8. Demand under Works Contract Service (WCS): - Appeal ST/40901/2014: The demand of ?3,69,76,010/- under WCS was not contested by the appellants, who had paid the amount. However, the interest liability was remanded for re-quantification. Conclusion: The Tribunal allowed the appeals on most issues, setting aside demands related to composite works contracts and reimbursable expenses, while remanding certain matters for re-quantification of interest liabilities. Penalties were generally waived due to prolonged litigation.
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