2018 (9) TMI 829 – CESTAT CHENNAI – TMI – Construction of residential complex service – non-payment of service tax – period from 1.10.2007 to 31.3.2008 – bonafide belief – demand alongwith penalty – Held that:- It is brought out from evidence that there is no intention to evade payment of service and that it was only a delay in payment of service tax. Further, during the relevant period, the issue whether the construction of residential complex service was taxable was under much dispute and being an interpretational issue, the contention of the appellant that they had bonafide belief regarding the classification and payment of service tax is not without force.
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The appellant has brought out a reasonable cause for non-payment of service tax and it is a fit case for invocation of section 80 of the Finance Act, 1994 – penalty set aside – remaining demand upheld.
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Appeal allowed in part. – Appeal No. ST/218/2011 – Final Order No. 42045/2018 – Dated:- 20-7-2018 – Ms. Sulekha Bee
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y of works contract service and not under construction of residential complex service since the contract also involves transfer of property in goods and is a composite contract. The department itself has extended the benefit of Notification No.1/2006-ST dated 1.3.2006 which shows that the contract is a composite contract and the Tribunal held that the activity undertaken by the appellant would fall under works contract service for the previous period from 16.6.2005 to 30.9.2007 vide Final Order No. 41509/2017 dated 3.8.2017. She submitted, however, the appellant is only contesting the penalty imposed under section 76 in the present appeal. It is her case that the entire service tax has been paid along with interest. The appellant has made full disclosure in the ST-3 returns filed by them, which is relied for issuance of the show cause notice. Therefore, it is only a case of belated payment of tax since during the period, there was serious doubt as to the classification of the service.
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Act. It is brought out from evidence that there is no intention to evade payment of service and that it was only a delay in payment of service tax. Further, during the relevant period, the issue whether the construction of residential complex service was taxable was under much dispute and being an interpretational issue, the contention of the appellant that they had bonafide belief regarding the classification and payment of service tax is not without force. The decisions relied by the ld. counsel in the case of Shree Hari Enterprises (supra) brings out the litigations that were pending on the said issue. Further, the Tribunal in the appellant s own case, for the previous period, has held that the services would fall under works contract service. Taking into consideration all these factors, we are of the considered opinion that the appellant has brought out a reasonable cause for non-payment of service tax and it is a fit case for invocation of section 80 of the Finance Act, 1994. We t
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