2024 (2) TMI 307 - AT - Service Tax

Short payment of service tax - Construction of Residential Complex Services for the period prior to June 2007 - Works Contract Service for the period 01.06.2010 to 30.09.2011 - demand under the head GTA Services for the period 01.06.2007 to 30.09.2011 - reverse charge mechanism - demand under Section 73A - HELD THAT - There is no illegality or impropriety in the impugned order. Learned Commissioner, in view of the observations of this Tribunal in its earlier Final Order dated 23.09.2014, has rightly held that the demand of Rs. 50,86,324/- does not survive being for the period prior to June, 2007. Further, it is found that the Learned Commissioner also rightly held that the head of service construction of residential complex cannot be changed to works contract service , as the same is hit by Section 65A of the Act. Once the change in the head of service is rejected in accordance with the law proposed for such classification when two equally applicable classification exist, the differential demand also does not survive amounting to Rs. 17,84,97,162/-. Demand of Rs. 3,98,08,809/- under Section 73A - HELD THAT - The Learned Commissioner has rightly gone into details and after going through the reconciliation rightly held that there is no case made out for non-payment of tax collected but not paid under Section 73A. Thus, there is no error in dropping the said demand also. It is further found that the only demand confirmed in the Order-in-Original Rs. 21,029/- under GTA service, which was not an issue and has not been interfered with. The same stands confirmed and appropriated in accordance with the law. There are no merits in this appeal by Revenue, accordingly the same is dismissed.

Summary

Issues Involved:
1. Demand of Rs. 50,86,324/- under "Construction of Residential Complex" services.
2. Demand of Rs. 20,17,82,210/- under "Works Contract Service."
3. Demand of Rs. 3,98,08,809/- under Section 73A.
4. Demand of Rs. 21,029/- under "GTA Services."

Summary:

1. Demand of Rs. 50,86,324/- under "Construction of Residential Complex" services:
The Tribunal held that the demand for Rs. 50,86,324/- does not survive as service tax cannot be levied on transactions between a developer/service provider and a purchaser of a flat prior to 01.07.2010. This was consistent with previous rulings in similar matters.

2. Demand of Rs. 20,17,82,210/- under "Works Contract Service":
The Tribunal observed that the demand was wrongly classified under "Works Contract Service" instead of "Construction of Residential Complex." The Commissioner noted that service tax was only chargeable from 01.07.2010 and not on the constructed area shared with the landowner. The difference of Rs. 18 crores was due to the erroneous reclassification by the Department, and thus, the demand was dropped.

3. Demand of Rs. 3,98,08,809/- under Section 73A:
The Commissioner detailed the reasons for the difference in the proposed and actual deposited amounts, noting that the service tax was proposed on non-taxable values such as projects below 12 units, projects not commenced, and projects transferred to other service providers. The demand was dropped as it was found that the service tax was rightly paid by the assessee, and the show cause notice was issued erroneously.

4. Demand of Rs. 21,029/- under "GTA Services":
The Tribunal confirmed that the demand of Rs. 21,029/- under GTA services was paid prior to the issuance of the show cause notice and was appropriated in the first Order-in-Original. Therefore, this issue no longer survives.

Conclusion:
The Tribunal found no illegality or impropriety in the impugned order and dismissed the Revenue's appeal. The cross-objections by the respondent-assessee were also disposed of, and the assessee was entitled to consequential benefits as per law.