2014 (2) TMI 292 - AT - Service Tax

Stay - Duty Demand Interest and Penalty u/s 78 Assesse was engaged in the business of providing commercial and industrial construction service and also construction of residential complex service Held that - The service would be liable to tax depending on the date of providing service and not based on the date of receiving payment or consideration in the form of land The contention that the huge amount of black money that exchanges hands in land deals and since the so called free construction was done for a party who made land available and not to a totally independent party cannot be accepted. Service tax payable on the owners share of the residential complex Revenue was of the view that the sale value of land was an artificial value recognized by the State authorities for the purpose of registration and was not the real value of the land - Construction undertaken for the land owner involves service rendered by the assesse to the land owner relying upon LCS City Makers Pvt. Ltd. Vs CST, Chennai 2012 (6) TMI 363 - CESTAT, CHENNAI . Part of the service to the land owners were received in the form of land prior to 01-06-2007 follows the contention that they started receiving consideration for the service only after 01-06-2007 does not appear to be correct - If liability accrued prior to 01-06-07, the assesse may not be eligible to scheme notified from 01-06-2007 a person who did not promptly pay tax can be put on a more advantageous position as compared to a person who complied with law cannot be held eligible for benefit of the new scheme as per Rule 3 (3) of Works Contract Rules - a harmonious construction may imply situations - If the demand was confirmed under the construction of complex service as proposed by Revenue as against works contract service adopted by assesse, the assesse may be eligible for the benefit of abatement under Notification No.1/06-ST with suitable adjustment for reversal of CENVAT credit taken. Waivers of pre-deposit 1crore were ordered to be paid as pre deposit upon such submission rest of the duty to be waived till the final disposal.

Summary

Issues:
1. Jurisdictional change request by Commissioner of Service Tax Chennai.
2. Tax liability dispute related to commercial and industrial construction services.
3. Separate analysis for Jayanth Tech Park Project.
4. Dispute regarding Joint Development Agreement and service tax liability.
5. Arguments on tax applicability under different service tax entries.
6. Dispute on construction done on land belonging to another party.
7. Disagreement on valuation of services provided.
8. Time-barred claim and disclosure issues.
9. Analysis of Swarup Heritage Project.
10. Dispute over service tax on owner's share of residential complex.
11. Comparison of land value and services rendered.
12. Prima facie views on tax liability and payment dates.
13. Consideration of abatement benefits and CENVAT credit.
14. Direction for pre-deposit amount and waiver.

Analysis:
1. The judgment starts with a jurisdictional issue where the Commissioner of Service Tax Chennai requested a name change in the appeal. The tribunal granted the request to ensure correct party representation in future proceedings.

2. The case involves a tax dispute regarding commercial and industrial construction services provided by the appellant. The Revenue alleged non-payment of tax liabilities for projects executed between May 2006 to March 2008, resulting in a significant demand and penalties.

3. The tribunal decided to analyze the issues separately for the Jayanth Tech Park Project and the Swarup Heritage Project due to differing circumstances and arguments presented.

4. For the Jayanth Tech Park Project, the dispute centered around the applicability of service tax entries and the Joint Development Agreement. The appellant argued for tax payment under a specific entry, while Revenue contended for a different tax liability based on construction services provided.

5. Various arguments were presented regarding the timing of payments, CENVAT credit claims, abatement benefits, and whether the demand was time-barred. The tribunal considered these arguments in detail to assess the tax liability accurately.

6. The Swarup Heritage Project involved a similar dispute over service tax on the owner's share of a residential complex. Arguments focused on the valuation of services provided, comparing land values, and determining the tax liability accurately.

7. The tribunal provided prima facie views on the tax liability, payment dates, abatement benefits, and the need for detailed scrutiny on time-barred claims and disclosures to ensure a fair assessment.

8. Ultimately, the tribunal directed the appellant to make a specific deposit, waived a portion of the pre-deposit for appeal admission, and stayed the collection of remaining dues during the appeal process.

This detailed analysis covers the key issues and arguments presented in the judgment, providing a comprehensive overview of the tax disputes and the tribunal's decisions.