2023 (10) TMI 993 - AT - Service Tax

Validity of SCN - SCN issued by way of change of opinion - Invocation of Extended period of limitation - Construction of Residential Complex service - Site formation and clearance, excavation and earth moving and demolition service - demand alongwith penalty - sale of individual houses constructed along with the plot of land to a buyer on a registered sale deed amounts amounts to service or not. HELD THAT - The SCN is evidently issued by way of change of opinion, in view of the facts, particularly the Appellant was registered with the Department, maintaining proper records and was filing returns as well as paying admitted tax. Further, Appellant, as early as on 07.10.2009, raised the issue of taxability with the Department for clarification and they have produced all their documents with respect to housing project promoted by them including development construction agreement. Thus, SCN dated 24.10.2011 is issued by way of change of opinion and there is no case made out of any concealment, suppression or fraud, etc., on the part of the Appellant and therefore on this account also, the entire demand has to fail. The impugned order set aside - appeal allowed.

Summary

Issues Involved:
The issue involved in this Appeal is whether demand of service tax has been rightly raised for the period 2006-07 to 2008-09 invoking the extended period of limitation, under two heads - Construction of Residential Complex service and Site formation and clearance, excavation, and earth moving and demolition service. The penalty has been imposed for failure to get registered and failure to file returns.

Construction of Residential Complex Service:
The Appellants started a project for construction and sale of independent houses, and sought clarification on their liability to pay service tax. They pointed out legal positions and circulars to support their stance. Despite paying service tax initially, doubts arose regarding liability. The Appellants submitted relevant documents and sought clarifications from authorities, but no response was received. The refund claim was rejected initially, but later granted after appeal and verification of unjust enrichment.

Site Formation and Clearance Service:
The Appellants were alleged to have wrongly changed the classification of service from 'Construction of residential complex service' to 'Works Contract service.' The demand was raised for collecting amounts from buyers for various amenities in the housing scheme. The Appellants were registered, paying taxes, and sought clarification on tax liability, leading to a refund claim which was eventually granted. The Appellants argued that the demands were issued by way of a change of opinion, and no case of concealment or fraud was made out.

Final Decision:
The Appellate Tribunal found that the demand was issued by way of a change of opinion, as the Appellants were registered, maintained proper records, and raised the issue of taxability with the Department. The Tribunal held that there was no case of concealment, suppression, or fraud on the part of the Appellant, and thus allowed the Appeal, setting aside the Impugned Order. The Appellant was entitled to consequential benefits in accordance with the law.