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TMI Blog2019 (9) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... meant for Educational purpose. Department issued a SCN, dated 21-10-2015, covering various aspects of the service rendered by the appellants and the same was confirmed by Commissioner of GST vide order No. MLR-EXCUS-000-COM-MS-15-16-17 dated 25/11/2016 which was issued on 16-12-2016. Commissioner confirmed duty of Rs. 1,66,73,956 along with penalty. Hence, this appeal. 2. Learned counsel for the appellants submits that at the outset they accepted the demand of Rs. 2,44,289 and dispute demand of Rs. 1,64,07,231 and claim that if at all the duty is confirmed they are also eligible to Cenvat Credit of Rs. 1,15,66,986. Learned counsel for the appellants submits on various items of demand as follows and submits as given under. 2.1. In relation to the activity Construction and sale of flats in the projects- Janardhana Heights and Janardhana Enclave, for a demand of Rs. 19,56,918 (from 2010-11 to 2012-13 (Up to 30.06.2012)) and Rs. 86,54,580 (from 2012-13 (from 01.07.2012) to 2014-15), for the Period, he submits that the amount collected from the prospective buyers included consideration towards undivided share of land; in a composite contract involving construction of flats and sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laws which provide for availment of credit on initiation of reassessment proceedings; the Departmental Representative submits that the Appellant is not eligible to avail credit, after initiation of proceedings, as the same would be in contradiction to proviso to Rule 4(1) of Cenvat Credit Rules,2004, which prescribes a time limit of six months (subsequently amended to one year) from the date of invoice, for the purpose of availing credit; the Appellant submits that the period of dispute involved in the present matter 2010-11 to 2014-15 and the relevant proviso to Rule 4.1 of Cenvat Credit Rules, 2004 prescribing time limit was inserted vide Notification No.21/2014 CE (NT), dated 11.07.2014 w.e.f 01.09.2014; majority of demand in the present matter was prior to such amendment and accordingly the Appellant is eligible to avail CENVAT credit without restriction for such period. The amendment, if applicable, will only apply to a restricted period of the dispute. Without prejudice, the Appellant places reliance on the following judgments. * Formica India Division v. CCE 1995 (77) E.L.T. 511 (S.C.) * CCE, Salem Vs Chemplast Sanmar Ltd 2009(239) E.L.T 398 (Mad.) 4. Learned Authorize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s before him for adjudication, based on facts and statutory provisions prevailing during the relevant period. The tax liability has been correctly arrived at after taking into consideration the applicable notifications/provisions as it existed prior to 30.6.2012 and for the period from 1.7.2012 onwards in respect of works contract, construction service and other issues covered in the Order-in-Original; Hence, the appeal may be rejected. 5. Heard both sides and perused the records of the case. Brief issue involved in the instant case is to see whether the appellants are liable to pay service tax on the amount received from the prospective buyers where such amount includes consideration towards undivided share of land within the period 2010-11 to 2014-15; on the services availed from two sub-contractors in undertaking construction activity when these sub-contractors have discharged the service tax liability; on the construction activity undertaken for educational institutions and on the deposits collected from all the buyers of residential apartment towards resident/owner welfare association to be used for future payments. 5.1. Coming to the first issue, we find that learned Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orkability of the provisions under which they are purportedly made, no purpose would be served by filing appeal against the said order and this question cannot be decided by the appellate authority under the Act. In the instant case, both the assessing officer and the appellate authority are bound to follow the instructions contained in the circulars. Therefore, no purpose would be served by filing appeal before the appellate authority. In order to constitute valid basis for taxation, the rate of deduction, specially a flat rate of deduction cannot be applied to calculate the taxable turnover in works contract. So those circulars cannot hold the field. As stated in the judgments referred to above, in the absence of any statutory basis for calculation of taxable turnover, the Act remains unworkable. Such gap in the statute cannot be filled up by the circulars which are purely ad hoc and administrative in nature and specially so when it relates to taxing law. It is a well-settled principle that in matters of taxation either the statute or the Rules framed under the statute must cover the entire field. Taxation by way of administrative instructions which are not backed by any auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 66 of the Act read with Section 65(105)(zzzh) of the Act could be charged in respect of composite contracts such as the ones entered into by the petitioners with the builder. The impugned explanation to the extent that it seeks to include composite contracts for purchase of units in a complex within the scope of taxable service is set aside." We also find that Hon'ble Delhi High Court has maintained the above order in the case of Vaani Kappor Vs.CST- 2019 (25) GSTL 534 (Del.-HC). In view of the above judgments, we find that service tax cannot be levied on the appellants on this count. 5.2. Coming to demand of service tax from the appellants on reverse charge mechanism on the services availed by them from two sub-contractors, we find that the appellants have submitted that the sub-contractors have already discharged service tax and the appellants have not availed Cenvat credit of the same. They have also submitted a copy of a declaration submitted by the said contractors. In this respect, we find that Karnataka High Court in the case of Nitesh Exports (supra) has held as follows: "18. The "Residential Complex‟ in question was undertaken to be constructed by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions that the construction activities of this nature where Bi-parte or Tri-partite Agreements are entered into is clearly indicated in the said Circular, which clearly and rightly hold the sub-contractors liable to pay the Service Tax as it is the Sub-contractor who actually undertakes the construction activity. 22. In view of the undisputed factual matrix of the present case, that the sub-contractor M/s. Larsen and Toubro Limited has duly discharged the obligations to pay the Service Tax in the present Contract, we are at a loss to understand how the Revenue could again demand the Service Tax from the respondent assessee M/s. Nithesh Estates Limited, the Principal Contractor or the Developer, who did not undertake any construction activity in the present case." We also find that Tribunal in the case of BCC Developers and Promoters Pvt. Ltd. (supra) have held that "6.1. We agree with the submission of the ld. Counsel that no double taxation is permissible under the law. The Constitution (Article 265) provides to take the exact amount of tax i.e. neither more nor less. In the instant case, if the principal has already paid the Service Tax, then the same cannot be demanded f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding constructed by them is not for the use of Commerce or Industry. 5.4. As regards demand of service tax on the one time deposit collected by the appellants from all the buyers of residential apaprtment towards resident/owner welfare association to be used for future payments which are deposited into a separate account and would be used for discharging statutory obligations such as property tax, water connection charges etc. We find that the appellants have collected these amounts. However, the same are to be used in future. The amount so collected by the appellants are not towards any service rendered to the buyers. The appellants are holding the money as a Trust to be handed over to the Welfare Associations which are to be formed on completion of the construction and occupation thereof. We find that Tribunal in the case of Kumar Beharay Rathi (supra) have held that 6.4 We also note that the appellants are not in the business of maintenance or repair service or management of immovable property. The appellants cannot be held as provider of maintenance or repair service as they are only paying on behalf of various buyers of flats to various authorities (Municipal Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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