Custom, Excise & Service Tax Tribunal
Madhukar Mittal vs Cce, Panchkula on 9 July, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
Court-III
Appeal No.ST/881/2009-CU (DB)
Date of Hearing/Order: 09.07.2015
(Arising out of Order-in-Original No.08/Commr/PKL/2009-10 dt.17.8.2009 passed by the CCE, Panchkula)
Honble Mr.R.K.Singh, Member (Technical)
Honble Ms.Sulekha Beevi C.S., Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
no
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
no
3.
Whether their Lordships wish to see the fair copy of the order?
seen
4.
Whether order is to be circulated to the Department Authorities?
yes
Madhukar Mittal Appellant
Vs.
CCE, Panchkula Respondent
Present for the Appellant: Shri Bipin Garg, Advocate Present for the Respondent: Shri Govind Krishna Dixit, AR Coram: Honble Mr.R.K.Singh, Member (Technical) Honble Ms.Sulekha Beevi C.S., Member (Judicial) FINAL ORDER NO.52832/2015 PER: R.K.SINGH Appeal has been filed against Order-in-Original dated 17.8.2009 in terms of which service tax demand of Rs.57,31,718/- alongwith interest was confirmed under construction of complex service (section 65(30a)/(105) (zzzh) of Finance Act, 1994) for the period 13.09.2006 to 13.10.2008 and equal amount of penalty under sectuib 78 ibid was also imposed.
2. The appellant has contended that (i) it constructed housing complex for Haryana Housing Board and its case is covered by the judgement of CESTAT in the case of Macro Marvel Projects Ltd. Vs.CST, Chennai-2008 (12) STR 603 (Tri.-Chennai) and A.S.Sikarwar vs. CCE, Indore-2012 (28) STR 479 (Tri.-Del.). (ii) It has been given 67% abatement after including value of free supplies while abatement should have been granted without including value of free supply in terms of judgement in the case of Bhayana Builders. (iii) Cum tax benefit should be granted to it. (iv) There was no wilful mis-statement/suppression of facts as the figures were obtained from the Haryana Housing Board, therefore no penalty is called for and substantial part of demand is time barred. (v) benefit of reduced mandatory penalty should be extended.
3. Learned DR stated that it is a clear case of construction of residential complex for Haryana Housing Board and therefore the judgements in the case of Macro Mavel Projects Ltd. Vs.CST, Chennai and A.S.Sikarwar vs. CCE, Indore are not applicable to the facts of this case. He submits that the residential complex constructed by appellant had common parking area, common community hall, common park, and more than 12 residential units and so is clearly covered within the purview of construction of complex defined in section 65 (30a) ibid.
Learned DR fairly stated that the demand should be computed on Rs.8,80,52,533/- (Rs.8,60,56,402/- paid by Haryana Housing Board plus TDS deducted) after giving abatement of 67% and value of free supply amounting to Rs.5,28,03,875/- should not have been added for the computation of demand and abatement. As regards suppression, learned DR contended that the appellant had clearly suppressed the information and had not given the same inspite of being asked through several letters. Ld.DR also contended that cum tax benefit should not be granted because the amount received from the Haryana Housing Board did not include tax as Haryana Housing Board clearly stated that no tax was payable and the provision clearly existed in the contract for payment of service tax by the Haryana Housing Board.
4. We have considered the contention. For the ease reference section 65 (30a)/(91a)/105(zzzh) are reproduced below:-
Section 65[(30a) construction of complex means
(a) construction of a new residential complex or a part thereof; or
(b) completion and 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;] Section 65 (91a) residential complex means any complex comprising of
(i) a building or buildings, having more than twelve residential units;
(ii) a common area; and
(iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person.
??Explanation. For the removal of doubts, it is hereby declared that for the purposes of this clause,
(a) personal use includes permitting the complex for use as residence by another person on rent or without consideration;
(b) residential unit means a single house or a single apartment intended for use as a place of residence.
Section (105) (zzzh) taxable service means any service provided or to be provided, to any person, by any other person, in relation to construction of complex.
[Explanation. For the purposes of this sub-clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorised 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 a person authorised by the builder before the 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;] We have also seen the ground plan of the complex constructed. The ground plan clearly shows that the complex has more than 12 units. The ground plan also clearly shows and states that it has common community hall, common parking area, and Common Park. We have seen photographs of the complex which make it evident that the complex has buildings having more than 12 residential units. Thus the complex constructed clearly satisfies the definitions of residential complex given in section 65 (91a) ibid and the service of construction of complex (defined in section 65 (30a)/105)/(zzzh) ibid. reproduced above.
5. In view above discussion, the judgements in the case of Macro Mavel Projects Ltd. Vs.CST, Chennai (supra) and A.S.Sikarwar vs. CCE, Indore (supra) are not applicable to the facts of the present case because in those cases individual residential houses were constructed which did not satisfy the definition of residential complex reproduced above. Thus, we hold that impugned service clearly gets covered under construction of complex service liable to service tax. However, as conceded by learned DR, the demand has to be worked out on the amount of Rs.8,80,52,533/- after giving 67% abatement without adding the value of free supplies in the light of the judgment in the case of Bhayana Builders Pvt. Ltd. Vs. CST, Delhi-2013 (32) STR 49 (Tri.-LB). As regards cum- tax benefit, learned DR opposed it on the ground that the amount received was not inclusive of service tax. In this regard, it is to be mentioned that Haryana Housing Board is not liable to pay any amount towards service tax in respect of the present case. This inference is supported by the fact that subsequent contracts with Haryana Housing Board clearly make provision for payment of service tax separately. In the circumstances, we are of the view that in view of clear provision of section 67 (2) ibid cum tax benefit is to be extended to the appellant. Coming to the aspect of mis-statement/suppression of facts it is evident that the appellant had not taken registration, did not pay service tax and did not file any ST-3 returns and did not give information inspite of being asked several times vide several letters. Not only that, it did not respondent to the several summons. Eventually the details had to be obtained from Haryana Housing Board. Thus there is absolutely no doubt that the appellant is guilty of suppression of facts and therefore not only extended period is invokable but the mandatory penalty is also attracted. As regards contention of the Advocate that the benefit of 25% of mandatory equal penalty has not been given by the lower authorities, we find that Gujarat High Court in the case of Chandan Steel Ltd.2015 (316) ELT 573 (Gju.) has held that the benefit of reduced mandatory penalty can be given by CESTAT if the same has not been extended expressly by the lower authorities.
6. In view of the above discussion, we uphold the impugned order with the modification that the demand confirmed is reduced to the amount of Service Tax calculated on 33% of Rs.8,80,52,533/- with the cum-tax benefit and the penalty under Section 78 is also modified to be equal to the demand so calculated. The primary adjudicating authority will intimate the appellant the demand of Service Tax and penalty (under Section 78) so calculated within 45 days of receipt of this order. If the entire demand so calculated alongwiith interest is paid within thirty days of receipt of such intimation then the mandatory penalty shall stand reduced to 25% of the ST demand so calculated provided that the reduced penalty (25% of the Service Tax so calculated) is also paid within thirty days of receipt of such intimation.
(dictated and Pronounced in the open court)
(SULEKHA BEEVI C.S.) (R.K.SINGH)
MEMBER (JUDICIAL) MEMBER (TECHNICAL)
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