2023 (8) TMI 795 - AT - Service Tax

Levy of service tax - Construction of Residential Complex Service - amount received against booking - allottees had stopped the payment and requested for cancellation of bookings and return of advance - revenue neutrality - extended period of limitation - HELD THAT - There is no dispute that the appellant was providing construction of residential complex service which is taxable. There is also no dispute that the appellant had collected advances from his customers towards sale of flats during the period October 2013 to March 2015. There is no doubt that such advances were liable to service tax. It was submitted by the appellant that they had returned the advances as allottees had stopped the payment and requested for cancellation of bookings - it is noted that no evidence has been provided by the appellant that establishes that these advances were returned. Extended period of limitation - misdeclaration or not - HELD THAT - A perusal of impugned order shows that the appellant had taken the same argument before the Commissioner (Appeals), who has noted that the appellant has simply argued that they have refunded the entire amount of advances to the various buyers without producing any evidence which seemed to be an afterthought. It is seen that the appellant has made no effort to provide any documents to evidence the return of the advance amount - The contention that an earlier show cause notice was issued and the information was in the knowledge of the department is also not evidenced by the records - extended period rightly invoked. Appeal dismissed.

Summary

Issues involved:
The appeal challenges the Order-in-Appeal confirming a demand of Rs.10,68,657/- along with penalty, pertaining to the provision of 'Construction of Residential Complex Services' by the Appellant.

Summary:
The appellant, engaged in providing 'Construction of Residential Complex Services', was issued a show cause notice for demanding service tax. The Adjudicating Authority ordered recovery of service tax with penalties imposed. On appeal, the demand was reduced to Rs.10,68,657/- along with penalty under section 78. The appellant contended that the demand was not sustainable as allottees had stopped payments and requested cancellations, rendering the exercise revenue neutral. They argued that the demand for the extended period was hit by limitation, as transactions were duly recorded and known to the revenue. The appellant cited legal precedents to support their arguments.

The Authorized Representative for the Department contended that the appellant willfully suppressed material facts to evade service tax, justifying the extended period.

The Tribunal found no dispute that the appellant provided taxable services and collected advances from customers. The appellant claimed to have returned the advances, but failed to provide evidence. The Tribunal rejected the appellant's contention. The Tribunal also dismissed the appellant's argument that the demand for the extended period was hit by limitation, noting that the appellant failed to provide evidence of refunding advances and had not filed ST3 returns during the relevant period. The Tribunal upheld the impugned order, dismissing the appeal.

In the judgment pronounced on 17/08/2023, the appeal was dismissed, and the impugned order confirming the demand and penalty was upheld.