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TMI Blog2024 (7) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has not discharged service tax on the amounts received from these parties. Show cause notices were issued for the period from 01.10.2010 to 31.12.2011 and January 2012 to June 2012 proposing to demand service tax under the category of Commercial or Industrial Construction Service (CICS) along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand of service tax under CICS along with interest. However, dropped the proposal to impose penalty under Section 78 for the period 01.10.2010 to 31.12.2011. Aggrieved by such order, for the period 01.10.2010 to 31.12.2011, the assessee has filed Appeal No. ST/40457/2014. The department has filed appeal ST/40527/2014 against the very same impugned order aggrieved by the non-imposition of penalty under Section 78 of the Finance Act 1994. The assessee has filed appeal number ST/42498/2014 aggrieved by the confirmation of demand of service tax, interest and penalties for the subsequent period January 2012 to June 2012. 3. The Ld. Counsel Ms. Radhika Chandrasekhar appeared and argued for the assessee. It is submitted that the assessee received work orders from M/s. HAL and M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from these Public Sector Undertakings and not discharged service tax only on bonafide belief that being services rendered to Public Sector Undertakings, there is no liability to tax. It is prayed that the assessee appeals may be allowed and the department appeal may be dismissed. 7. The Ld. AR Ms. O.M. Reena, appeared and argued for the department. The findings in the impugned order at paragraph 17.02 to 17.04 was adverted to by the Ld. AR. to submit that the construction services rendered by the assessee would correctly fall under the classification of Commercial or Industrial Construction Services and not Works Contract Services. The asseesee has rendered civil work for which they have received remuneration for CICS and this will correctly fall under the definition of CICS. 8. The argument of the Ld. Counsel of the assessee that the service recipient being Public Sector Undertaking, the consideration received cannot be subject to service tax was countered by the Ld. AR by referring to para 16.03 & 16.04 of the impugned order. Further submitted that the adjudicating authority ought to have imposed penalties on the assessee for the reason that the nonpayment of service tax would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the activity of M/s. Krishna Homes and M/s. Raj Homes was taxable during the period of dispute or not, by Finance Act, 2005, Clause (zzzh) was introduced into Section 65(105) of Finance Act, 1994, so as to bring within the purview of the term 'taxable service', a service provided or to be provided to any person by any other person "in relation to construction of complex". The expression "construction of complex" was defined in sub-section (30a) of Section 65 and accordingly this expression covered - "(a) construction of a new residential complex or a part thereof or (b) completion of finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex". The expression residential complex was defined in Section 65(91a) of the Finance Act, 1994 as any complex comprising of - "(i) a building or buildings, having more than twelve residen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorized by the builder before grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer." Thus, in terms of this explanation, when a builder/promoter/developer got a residential complex constructed for his customers with whom he had individually entered into agreements, in terms of which the prospective customers were required to make payments for the residential units to be constructed in instalments and the possession of the residential units was to be given to the customers on completion of the complex and full payment having been made, the builder/promoter/developer was to be treated as a deemed provider of construction of residential complex service to his customers. Thus, by this explanation, the scope of the Clause (zzzh) of Section 65(105) has been expanded and this amendment by adding an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the case of Jain Housing & Construction Ltd. (supra) was maintained by the Apex Court as reported in (2023) 10 Centax 171 (SC). We are of the considered opinion that for these reasons, the demand for the period upto 1.7.2010 cannot sustain and requires to be set aside. 7. In the SCN it is mentioned that the demand is raised for the period after 1.7.2010 also (July 2010 to September 2010). In para-4 of the SCN it is stated that the appellant has paid the service tax of Rs.67,77,193/- for the period July 2010 to September 2010 which reads as under : 4. The assessee was asked to furnish details of amount received for construction of residential complex for the subsequent period i.e. from October, 2009 to September, 2010. On verification of the details provided by the assessee vide letter 25.11.2010, it was seen that the assessee has received Rs. 45,84,45,111/- towards "Construction of Residential Complex Service" during the period from October, 2009 September, 2010. The service tax liable to be paid by the assessee works out to 1,55,82,549/- on the taxable value of 15,12,86,887 /-. The assessee has paid service tax of Rs. 67,77, 193/ -for the period from July, 2010 to Septe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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