Hallmark Infrastructure Pvt. Ltd. Versus Commissioner of GST & Central Excise, Chennai South Commissionerate
Service Tax
2018 (12) TMI 1040 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 18-12-2018
Application No. ST\/Misc\/41618\/2017, Appeal No. ST\/573\/2012 – FINAL ORDER No. 43116\/2018
Service Tax
Shri Madhu Mohan Damodhar, Member (Technical) And Shri P. Dinesha, Member (Judicial)
\nMs. Vishnupriya, Advocate For the Appellant
\nMs. T. Usha Devi, DC (AR) For the Respondent
\nORDER
\nPer Shri Madhu Mohan Damodhar
\nThe facts of the case are that appellants were providing construction services and site formation services. From the investigation caused by the department, it emerged that appellants were rendering construction of residential complex in respect of Golden Country Project at Maraimalai Nagar, Kanchipuram District concerning 240 flats in Phase-I. It also appeared that they were engaged in providing site formation and clearance service with respect to their<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n arance service for the period April 2006 to March 2008, totalling to Rs. 1,11,53,419\/- towards service tax liability along with interest thereon. Equal penalty was imposed under Section 78 of the Act. Penalty was also imposed under Section 77 (2) ibid for not filing ST-3 returns. Hence this appeal. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n activity involving construction of new residential complex involving indivisible composite contract, such services will require to be exigible to service tax only under “Works Contract Service”. It is settled law that for an activity involving indivisible composite contract, such service will be exigible to service tax only under “works Contract Service” on or after 01.06.2007 and not under “Residential Complex Service” as per the judgment of this Hon'ble Tribunal in the case of Real Value Promoters Pvt Ltd Vs Commissioner of GST and Central Excise – final order no.42436-42438\/2018 dated 18.09.2018. Therefore, in view of the above, the demand proposed under “Residential Complex Service” cannot sustain. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n it and loss account of the respective financial years. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n t as per the law laid down by the Hon'ble Supreme Court in the case of Larsen & Toubro Ltd. (supra) and the decision of this very Bench in the case Real Value Promoters (supra), the said activity will be exigible to service tax only under “Works Contracts Service” and not under Residential Complex Service as has been demanded in the impugned order. In view thereof, we have no hesitation in setting aside the demand of Rs. Rs. 83,77,188\/- with interest thereon under the category of construction of residential complex service. The portion of the impugned order to the contrary demanding the aforesaid amount with interest thereon is set aside. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n out, the plotting of the land with various parcels will naturally fetch higher price for the land. This being so, the site formation and clearance activity has obviously been done by the appellant by themselves, for themselves. Further neither the agreement for sale had not seen light of the day, nor were the buyers visible on the horizon, at the time when the site formation etc of the land was carried out by the appellant. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Hallmark Infrastructure Pvt. Ltd. Versus Commissioner of GST & Central Excise, Chennai South CommissionerateService Tax2018 (12) TMI 1040 – CESTAT CHENNAI – TMICESTAT CHENNAI – ATDated:- 18-12-2018Application No. ST\/Misc\/41618\/2017, Appeal No. ST\/573\/2012 – FINAL ORDER No. 43116\/2018Service TaxShri Madhu Mohan Damodhar, Member (Technical) And Shri P. Dinesha, Member (Judicial) Ms. Vishnupriya, Advocate For the Appellant … Continue reading “Hallmark Infrastructure Pvt. Ltd. Versus Commissioner of GST & Central Excise, Chennai South Commissionerate”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15596","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15596"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15596\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n2. When the matter came up for hearing, on behalf of the appellants, Ld. Advocate Ms. Vishnupriya made oral and written submissions which can be broadly summarised as under:
\n(i) With regard to the demand made under “residential complex service”, the issue as to whether a composite contract involving provision of service as well as transfer of property in goods could be covered under “Residential Complex Service” (hereinafter referred to as “RCS”) from the date of introduction of service tax on such services was being litigated upon and which was finally settled by the Hon'ble Supreme Court in the case of CCE Vs Larsen and Toubro Ltd – 2015 (39) STR 913 (SC). The Apex Court observed that in<\/p>\n
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\n(iii) With regard to the demand made under “site formation and clearance service”, the amount of Rs. 2,38,89,740\/- (FY 2006-07) has been subjected to service tax erroneously. This amount consists of two figures, namely, a sum of Rs. 1,91,89,740\/- received from one of the promoters of <\/p>\n
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\n(vii) A sum of Rs. 1,58,08,252\/- (FY 2007-08) is accounted as sale of land in the Profit and Loss Account for the year ending 31st March 2008 and an amount of Rs. 15,54,548\/- is shown as land development charges under the head “Income”. Actually, both these figures are nothing but income from sale of UDS. The sum of Rs. 1,58,08,252\/- has been accounted as income from sale of land in the Profit and Loss account for the year ending 31st March 2008 and an amount of Rs. 15,54,548\/- has been accounted under the head “Land Development Charges” in the Profit and Loss Account for the year ending 31st March 2008.
\n(viii) It is a settled law that any expense incurred before the transfer of goods forms part of the sale price and cannot form part of any service tax liability.
\n(ix) The aforesaid amount of Rs. 2,38,89,740\/- is a reimbursement for the expenses (i.e. Rs. 2,90,73,680\/-) incurred by them without any provision of service.
\n3. On th<\/p>\n
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\n6.2 The second demand relates to site formation and clearance service allegedly provided by the appellant. During the adjudication proceedings appellants have contended that the said activities were undertaken before sale of land took place, hence the service was a self-service and there is no service provider and service recipient relationship and t<\/p>\n
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\n6.3 We therefore have no doubt in our mind that the such activity was a self service and hence the same cannot be exigible to service liability under the Finance Act,1994. This being so, portion of the the impugned order to the contrary demanding Rs. 27,76,231\/- with interest thereon under the category of site formation and clearance service cannot be sustained and will have to be set aside, which we hereby do. The demands having been set aside, in consequence penalties are also set aside.
\n7. Appeal is therefore allowed in toto with consequential benefits, if any<\/p>\n
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