Custom, Excise & Service Tax Tribunal
Bengal Ambuja Housing Development Ltd vs Service Tax-I, Kolkata on 5 August, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 75751 of 2017
(Arising out of Order-in-Appeal No. 30-31/ST-I/KOL/2017 dated 31.01.2017 passed
by the Commissioner of Central Excise (Appeal-I), Kolkata 169, A.J.C. Bose Road,
Bamboo Villa (4TH Floor), Kolkata-700 014)
M/s. Bengal Ambuja Housing Development Ltd. : Appellant
Viswakarma, 86C Topsia Road(S)
Kolkata-700 046
VERSUS
Commissioner of Service Tax, : Respondent
Service Tax-I Commissionerate, Kolkata 180, Shantipally, Rajdanga Main Road, Kolkata-700107 APPEARANCE:
Shri Pulak Saha, Chartered Accountant (FCA) Shri Bikash Gupta, Chartered Accountant (ACA) for the Appellant Shri S. Dey, Authorized Representative for the Respondent CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL) HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO.77319/2025 DATE OF HEARING / DECISION: 05.08.2025 Order: [PER SHRI K. ANPAZHAKAN] The present appeal has been filed against the Order-inAppeal No.30-31/ST-1/KOL/2017 dated 31.01.2017, wherein the Ld. Commissioner (Appeals) has upheld the demands confirmed in the Order-in-Original No. 01/ADC/ST/Kol/2011-12 dated 29.04.2011.
2. The facts of the case are that M/s. Bengal Ambuja (herein after referred as the Appellant ) is a joint sector company within the meaning of Section Page 2 of 21 Appeal No.: ST/75751/2017-DB 27A of the West Bengal Housing Board Act, 1972 and is registered under the Companies Act, 1956 having its Registered Office in Kolkata, West Bengal. The Appellant is primarily engaged in the business of development and sale of real estate properties. The Appellant is appropriately registered under Service Tax law with the jurisdictional Service Tax Authority. The Appellant has been also regular in discharging applicable service tax and filing the periodical Service Tax Returns with the jurisdictional Service Tax Authority.
2.1. The disputed demand as per the impugned Order-in-Appeal is tabulated below:
Period Amount (Rs.) Nature of demand 2006-07 16,06,922 Simultaneous benefit of Notification No. 1/2006-ST dated 01.03.2006 and availment of Cenvat Credit on input services under Notification No. 18/2005-ST, dated 07.06.2005 2005-06 & 2,42,413 Maintenance & Repair Charges 2006-07 2005-06 & 23,58,945 Club or Association Service 2006-07 2005-06 & 22,817 Security Services 2006-07 Page 3 of 21 Appeal No.: ST/75751/2017-DB 2006-07 2,71,320 Irregular availment of Cenvat credit on input services
3. Regarding the demand of Rs. 16,06,922/- towards taking simultaneous benefit under Notification no. 1/2006 and CENVAT Credit on input services, the Appellant submits that "construction of residential complex" was brought under service tax net w.e.f. 16.06.2005 and accordingly the Appellant obtained service tax registration on 05.08.2005 under the said classification. At the time when "construction of residential complex" was brought under service tax net, the Appellant was engaged by HIDCO, Govt. of West Bengal for construction of cost optimized housing complex consisting of seven 'C' type buildings and one community centre building. At that point in time the Appellant was taking the benefit of Notification No. 18/2005-ST, dated 07.06.2005 which allowed abatement of 67% of the value of the construction contract subject to the condition of non-availment of CENVAT Credit on Capital goods and inputs. However, that notification did not restrict taking CENVAT Credit on input services. That project was completed and handed over to HIDCO by 28.02.2006. However, certain outstanding payment in this regard was received by the Appellant during the financial year 2006-07.
3.1. The Appellant states that in the impugned show cause notice, it was alleged that the Appellant has taken simultaneous benefit of 67% abatement as well as CENVAT Credit on input services, which as per the department is a contravention to the Page 4 of 21 Appeal No.: ST/75751/2017-DB Notification No. 1/2006-ST, dated 01.03.2006. The Appellant submits that the Notification 1/2006-ST, dated 01.03.2006 was not in existence during the relevant period. Notification No. 18/2005-ST, dated 07.06.2005, which was in existence during the relevant period did not restrict taking CENVAT Credit on input services. When the construction service was rendered, the Appellant correctly took the benefit of abatement of 67% of the value as well as the CENVAT Credit on input services used for providing the construction services as there was no restriction for taking CENVAT Credit on input services during the period from 16.06.2005 to 28.02.2006. Based on this correct interpretation, the adjudicating authority dropped the demand of Rs.16,06,922/-. However, in response to the appeal filed by the department, the Ld. Commissioner (Appeals) reversed the Order-in- Original and confirmed the demand of Rs.16,06,922/- with the contention that since realization of payment from the service recipient occurred during FY 2006-07, when Notification No. 01/2006-ST, dated 01.03.2006 was in vogue, benefit of Notification No. 18/2005-ST, dated 07.06.2005 could not be availed.
3.2. In this regard, the Appellant submits that vide the impugned SCN it was alleged that rescinding of Notification no. 18/2005 ST dated 07.06.2005 by Notification no. 1/2006 -ST dated 01.03.2006 had the simultaneous effect of coming into being the Notification no. 1/2006 - ST dated 01.03.2006 and thus CENVAT Credit on input services as well as 67% abatement on the value of taxable services cannot be availed by the Appellant. However, in the impugned Order - in - Appeal, the Ld. CCE (Appeals
- I) stated that since realization of payment from the Page 5 of 21 Appeal No.: ST/75751/2017-DB service recipient occurred during the FY 2006-07, when Notification No. 1/2006 -ST dated 01.03.2006 was in vogue, benefit under Notification No. 18/2005
-ST dated 07.06.2005 could not be availed. Thus, the Ld. CCE (Appeals - I) travelled beyond the scope of SCN to reconfirm the demand earlier dropped in the Order-in-Original, which is clearly untenable in law. Thus, the appellant submits that the impugned demand is liable to be dropped on this ground alone. In this regard reliance may be placed on the decision of the Tribunal, Ahmedabad in the case of N.D. Metal Industries Ltd. versus Commissioner of Central Excise, Vapi [2013 (292) E.L.T. 520 (Tri. - Ahmd.)] 3.3. The Appellant submits that during the relevant period (16.06.2005 to 28.02.2006), the Notification No. 1/2006-ST dated 01.03.2006 was not even in existence as the construction was fully completed by February 2006 i.e. before 01.03.2006, the date of issue of the Notification. Thus the question of availing exemption under Notification No. 1/2006 - ST dated 01.03.2006 does not arise at all. Therefore, the conditions stipulated in this notification have no application in the given case. In view of the aforesaid facts on record, the Appellant submits that since the provision of construction services was completed before issue of Notification No. 1/2006-ST dated 01.03.2006, the Appellant has correctly taken the benefit of Notification No. 18/2005-ST dated 07.06.2005 which did not restrict the availment of CENVAT Credit on input service and it only restricted the availment of CENVAT Credit on inputs and capital goods which the Appellant never taken and there was no dispute also in this regard from the department.
Page 6 of 21Appeal No.: ST/75751/2017-DB 3.4. The Appellant further submits that the Appellate Authority has wrongly interpreted the law by stating that since the amount was realized and service tax was payable during 2006-07 when Notification No.1/2006-ST, dated 01.03.2006 was in force, the benefit of Notification No. 18/2005 could not be availed. In this regard, the Appellant submits that as per the law during the relevant period, it was a well settled principle of law that the taxable event or the incidence of levy of service tax occurs when service is rendered and not when payment is received. Reliance in this regard may be placed on the decision in the case of Santosh Associates v Commissioner of Service Tax, Ahmedabad [2009 (16) S.T.R. 87 (Tri. - Ahmd.)] wherein it was held that when services have been rendered prior to 01.03.2006 and payment has been received post 1- 3-2006, the abatement as provided under notification no. 1/2006 - ST dated 01.03.2006 cannot be denied.
3.5. On the basis of the above judicial precedence, the appellant submits that the benefit of the Exemption Notification No 18/2005- ST dated 07.06.2005 cannot be denied to them.
4.In regard to the demand of Rs.2,42,413/- towards "Repair & Maintenance" of STP, the Appellant states that in 2001 it developed and handed over to the purchasers of the units in a residential cum commercial complex namely, the "Udayan - The condoville" which comprised of the following four zones:
Page 7 of 21Appeal No.: ST/75751/2017-DB Udita Complex - meant for high income group buyers, presently being maintained by Udita Owners' Association; Utsarg-Utsav Complex - meant for low and middle income group buyers, presently being maintain by Utsarg-Utsav Co-operative Housing Society Ltd.;
Unnayan Complex -meant for
commercial use, presently being
maintained by Unnayan (Survey Park) Welfare Association;
STP Zone - consisting of Sewerage Treatment Plant meant for common use of all the above three zones.
4.1. The Appellant states that out of the aforesaid complexes, the maintenance of Udita Complex, Utsarg - Utsav Complex and Unnayan Complex was done by the respective Owner's association and there was no involvement on the part of the Appellant. Whereas, the STP zone was supposed to be owned, managed and maintained by a separate body corporate to be promoted by the allottees of Udayan-The Condoville. However, since the allottees were yet to form the said body corporate, the Appellant being the promoter and developer of the Page 8 of 21 Appeal No.: ST/75751/2017-DB housing project and considering the importance of the STP zone, had to arrange for the maintenance of the STP by procuring the maintenance services and paying for electricity expenses for and on behalf of the allotees as a "pure agent" of the allotees of the entire complex. The Appellant merely acted as a 'pure agent' on behalf of the allottees of the Complex and only procured the necessary services and paid for electricity to maintain the said STP zone.
Accordingly, the appellant incurred various expenses required for the maintenance and running of the STP and the expenditure so incurred was reimbursed on actual basis by the allottees through the maintenance association of the allottees. The Appellant neither rendered any management and maintenance service to the allottees of "Udayan-The Condoville" nor received any consideration towards the same during the relevant period. It merely acted as a "pure agent" of the allottees of the units.
4.2. The Appellant submits that under Explanation 1 to sub-rule (2) of Rule 5 of Service Tax (Determination of Value) Rules, 2006 'pure agent' means a person who-
enters into a contractual agreement with the recipient of service to act as his pure Page 9 of 21 Appeal No.: ST/75751/2017-DB agent to incur expenditure or costs in the course of providing taxable service;
neither intends to hold nor holds any title to the goods or services so procured or provided as pure agent of the recipient of service;
does not use such goods or services so procured; and receives only the actual amount incurred to procure such goods or services.
4.3. In support of its claim that it acted as a "pure agent", the appellant has attached Specimen copies of debit notes raised by them in this regard and a copy of the ledger from the books of account maintained for the period from 1st April 2005 to 31 March 2006. From the aforesaid documents and ledger copy, the Appellant submits that they have satisfied all the criteria of a 'pure agent' in the instant case relating to the maintenance of the STP and therefore, not liable to pay service tax on such pure reimbursement of expense.
4.4. In this regard, the Appellant relies upon the following decisions:
Page 10 of 21Appeal No.: ST/75751/2017-DB
(i) Sangamitra Services Agency v Commissioner [2007 (8) S.T.R. 233 (Tri-
Chennai)]
(ii) Mckinsey & Company, Inc v Commissioner [2007 (6) S.T.R. 420 (Tri- Mumbai)]
(iii) Jayalakshmi Enterprises v. Commissioner [2008 (9) S.T.R. 19 (Tri-Bangalore)] 4.5. The Appellant further submits that even after the introduction of Service Tax (Determination of value) Rules 2006, expenses incurred by a pure agent is not includible in the taxable value in view of the judgement of Hon'ble Supreme Court in Intercontinental Consultants & Technocrats Pvt. Ltd., reported in 2018 (3) TMI 357.
4.6. In view of the above submissions, the appellant prayed for setting aside the demand confirmed in the impugned order on this count.
5. In regard to the demand of Rs.23,58,945/- under "Club & Association Service" the Appellant states that the demand of Rs.23,58,945/- pertains to collection of deposit and receipt of construction charges for club facility totaling to Rs.1,99,90,750/- in respect of its two residential projects namely "Utsa" and "Ujjwala" respectively. In this regard, the Appellant states that during the FY 2002-03 to 2004- 05, they have collected an aggregate amount of Rs.35,90,000/- towards 'refundable deposit' for club from the members of the "Utsa" and the same was also refunded to the Association on 21.05.2008 along with interest once the Apartment Owners Association was formed. The Appellant further states that they have collected from the prospective buyers of the Page 11 of 21 Appeal No.: ST/75751/2017-DB residential units of "Ujjwala" an amount of Rs.7,42,000/- and Rs.1,56,58,750/- during the FY 2005-06 and FY 2006-07 respectively for construction and handing over the club to them once the construction is complete.
5.1. The Appellant submits that the character of the receipt of this money is in the nature of 'deposit' and not for provision of any service. Thus, the appellant submits that no service tax is payable by the Appellant on such deposit amount of Rs.35,90,000/- and the demand confirmed under "club or association service" in the impugned order is liable to be set aside.
6. In regard to the demand of Rs.22,817/- under "Security Service", the Appellant states that as per the General Terms and Conditions (GTC) every allottee must have to take the physical possession of the concerned flat on the date to be notified by the Appellant which is called the "Deemed date of Possession". Accordingly, in every GTC relating to a residential project developed by the Appellant, a specific clause is provided as 'Compensation for Delay in Possession'. The said clause is divided in two parts - Part A and Part B. Part A provides for compensation payable per month by the Appellant as promoter/developer to the flat owners in the event of delay in completion of the project and actual handing over of possession of the apartment. Part B provides for compensation payable per month by the allottee if he fails to take possession of his apartment as and when called upon by the Appellant to do so. Such compensation termed as 'guarding charges' is payable at the specified rates stated in the GTC from Page 12 of 21 Appeal No.: ST/75751/2017-DB the deemed date of possession or such later date as decided.
6.1. The Appellant states that in the instant case demand of Rs.22,817/- has been confirmed under the category of "security agency service". The Appellant submits that they did not provide any security services to any of the flat owners in the residential complexes constructed by them, during the material period within the meaning of Section 65(94) of the Finance Act, 1994. The Appellant submits that Section 65(94) of the Act defines the term 'Security Agency' and accordingly 'Security Agency' means "any person engaged in the business of rendering services relating to the security of any property, whether movable or immovable, or any person, in any manner and includes the services of investigation, detection or verification of any fact or activity, whether of personal nature or otherwise, including the services of providing security personnel." .
6.2. The Appellant submits that they were not engaged in the business of rendering the services relating to security of the flats neither it provided any security services to any of the allottees in the residential complexes constructed by it. In fact it is a form of penalty for not taking the physical possession within the stipulated time framed by the Appellant and no underlying service is involved in the instant case.
6.3. In view of the above facts, the Appellant contends that since compensations received for not taking physical possession of flats cannot be construed as providing security services to any person, the Appellant is not liable to service tax on Page 13 of 21 Appeal No.: ST/75751/2017-DB the compensations received as guarding charges from the allottees of the flats. Accordingly, the Appellant submits that the amount recovered was in the nature of penalty and not for providing security services and hence the same cannot be subjected to service tax. Hence the demand is liable to be set aside.
7. In regard to recovery of Cenvat Credit amounting to Rs.2,71,320/- , the Appellant submits that they have paid Service Tax of Rs. 2,71,320/- along with interest of Rs. 1,85,345/-, and 25% penalty amounting to Rs. 67,830/-, under protest, as per second proviso to Section 78 of the Finance Act, 1994 on 26.05.2011. Copy of the paid challan dated 26.05.2011 was also forwarded to the Department under cover of the Appellant's letter dated 27.05.2011.
8. Regarding invocation of extended period of limitation to confirm the demand, the Appellant submits that there was no suppression of facts in the instant case as the matter involves interpretation of statutory provisions and that Appellant acted on a bona fide belief that CENVAT credit could be availed on input services received prior to Notification No. 1/2006 -ST becoming effective and no service tax was payable in respect of the other issues for the reasons mentioned herein above. It is a settled position of law that when the matter involves interpretation of statutory provisions and the assessee acted on a bona fide belief, extended period of limitation cannot be invoked. The Appellant in this respect relies upon the decisions of the Apex Court in the case of Padmini Products vs. Collector of Central Excise. [1989 (43) E.L.T. 195 (S.C.)].
Page 14 of 21Appeal No.: ST/75751/2017-DB Accordingly, the appellant prayed for setting aside the demands confirmed in the impugned order on account of limitation.
9. The Ld. A.R. reiterated the findings in the impugned order.
10. Heard both sides and perused the appeal documents.
11. We observe that during the period under dispute, the Appellant was engaged in construction of housing complex for Govt. of West Bengal. The Appellant has availed the benefit of Notification No. 18/2005-ST, dated 07.06.2005 which allowed abatement of 67% of the value of the construction contract subject to the condition of non-availment of Cenvat Credit on Capital goods and inputs. However, that notification did not restrict taking Cenvat Credit on input services. That project was completed and handed over to HIDCO by 28.02.2006. However, certain outstanding payment in this regard was received by the Appellant during the financial year 2006-07.
11.1. In the impugned order, it has been alleged that the Appellant has taken simultaneous benefit of 67% abatement as well as Cenvat credit on input services, which is not permissible as per Notification No. 1/2006-ST, dated 01.03.2006. In this regard, we observe that during the relevant period when appellant has rendered construction service, the Notification 1/2006-ST, dated 01.03.2006 was not in existence. The appellant has availed the benefit of Notification No. 18/2005-ST, dated 07.06.2005, which was in existence during the relevant period, which did not restrict taking Cenvat Credit on input Page 15 of 21 Appeal No.: ST/75751/2017-DB services. We observe that the project was completed and handed over to HIDCO by the appellant prior to 28.02.2006. However, certain outstanding payment in this regard was received by the Appellant during the financial year 2006-07. Since the provision of construction services was completed before issue of Notification No. 1/2006-ST dated 01.03.2006, we hold that the Appellant has correctly taken the benefit of Notification No. 18/2005 -ST dated 07.06.2005 which did not restrict the availment of Cenvat credit on input service and it only restricted the availment of Cenvat credit on inputs and capital goods which the Appellant never taken and there was no dispute on this. Thus, we observe that the Notification No. 1/2006-ST dated 01.03.2006 available during the time of receipt of payment has no relevance for the services rendered, as the appellant has rightly availed the benefit of Notification No. 18/2005-ST, dated 07.06.2005, which was in existence during the relevant period, when the service was rendered. We observe that the Ld. Appellate Authority has wrongly interpreted the law by stating that since the amount was realized and service tax was payable during 2006-07 when Notification No.1/2006-ST, dated 01.03.2006 was in force, the benefit of Notification No. 18/2005 could not be availed. We do not agree with the view of the Ld. Commissioner (Appeals). We observe that the Notification No. 1/2006-ST dated 01.03.2006 available during the time of receipt of payment has no relevance for the services rendered prior to issue of the Notification. We hold that the appellant has rightly availed the benefit of Notification No. 18/2005-ST, dated 07.06.2005, which was in existence during the relevant period, when the Page 16 of 21 Appeal No.: ST/75751/2017-DB service was rendered. Accordingly, we hold that the demand confirmed in the impugned order on this count is not sustainable.
11.2. We find that the same has been held by the Tribunal, Ahmedabad in the case of N.D. Metal Industries Ltd. versus Commissioner of Central Excise, Vapi [2013 (292) E.L.T. 520 (Tri. - Ahmd.)], wherein it has been held as under:
11.3. On the basis of the above judicial precedence cited supra, we hold that the benefit of the Exemption Notification No 18/2005- ST dated 07.06.2005 cannot be denied to the appellant, at the time of receipt of the payment. Thus, by relying on the decision cited supra, we hold that the demand the demand confirmed in the impugned order on this count is not sustainable and hence, we set aside the same.
12. Regarding the demand of Rs.2,42,413/- towards "Repair & Maintenance" of STP, we observe that the STP zone was supposed to be owned, managed and maintained by a separate body corporate to be promoted by the allottees of 'Udayan-The Condoville'. However, since the allottees were yet to form the said body corporate, the Appellant being the promoter and developer of the housing project had to arrange for the maintenance of the STP by procuring the maintenance services and paying for electricity expenses for and on behalf of the allottees as a "pure agent" of the allottees of the entire complex. Thus, we observe that the Appellant has acted only as a 'pure agent' on behalf of the allottees of the Complex and only procured the necessary services and paid for electricity to maintain the said STP Page 17 of 21 Appeal No.: ST/75751/2017-DB zone. Accordingly, we find that the appellant incurred various expenses required for the maintenance and running of the STP and the expenditure so incurred was reimbursed on actual basis by the allottees through the maintenance association of the allottees. We observe that the Appellant neither rendered any management and maintenance service to the allottees of "Udayan-The Condoville" nor received any consideration towards the same during the relevant period. Accordingly, we hold that the appellant has only acted as a "pure agent" of the allottees of the units and not rendered any management and maintenance service to the allottees. Hence, we hold that the demand confirmed in the impugned order on account of this issue is not sustainable.
12.1. Even after the introduction of Service Tax (Determination of value) Rules 2006, we observe that the expenses incurred by a pure agent is not includible in the taxable value in view of the judgement of Hon'ble Supreme Court in Intercontinental Consultants & Technocrats Pvt Ltd., reported in 2018 (3) TMI 357. The relevant part of the said decision is reproduced below:
12.2. Thus, in view of the discussions and by relying on the decisions cited supra, we set aside the demand confirmed in the impugned order on this count.
13. Regarding the demand of Rs.23,58,945/-
under "Club & Association Service" we observe that that the appellant had collected 'refundable deposit' for the club from the members of the "Utsa" and the same was also refunded to the Association on 21.05.2008 along with interest once the Apartment Page 18 of 21 Appeal No.: ST/75751/2017-DB Owners Association was formed. In respect of construction of Club for "Ujjwala" the Appellant had collected the 'refundable deposit' from the prospective buyers of the residential units of "Ujjwala" and the said money would be handed over the the Association, once the construction is complete. Thus, we observe that the money received in the nature of 'deposit' and not for provision of any service. Accordingly, we hold that no service tax is payable by the Appellant on such deposit amount under "club or association service". Accordingly, we set aside the demand of service tax confirmed under the category of "club or association service' in the impugned order.
14. Regarding the demand of Rs.22,817/- confirmed under "Security Service", we observe that as per the General Terms and Conditions (GTC) every allottee must have to take the physical possession of the concerned flat on the date to be notified by the Appellant which is called the "Deemed date of Possession". There is a specific clause in the GTC to levy 'Compensation for Delay in Possession'. The said Clause provides for compensation payable per month by the allottee if he fails to take possession of his apartment as and when called upon by the Appellant to do so. Such compensation termed as 'guarding charges' is payable at the specified rates stated in the GTC from the deemed date of possession or such later date as decided. In the instant case, we observe that the demand of Rs.22,817/- has been confirmed under the category of "security agency service" on the amount received by the appellant as 'Guarding Charges'.
Page 19 of 21Appeal No.: ST/75751/2017-DB 14.1. We observe that Section 65(94) of the Act defines the term 'Security Agency' and accordingly 'Security Agency' means "any person engaged in the business of rendering services relating to the security of any property, whether movable or immovable, or any person, in any manner and includes the services of investigation, detection or verification of any fact or activity, whether of personal nature or otherwise, including the services of providing security personnel." .
14.2. We observe that the appellant were not engaged in the business of rendering the services relating to security of the flats neither they provided any security services to any of the allottees in the residential complexes constructed by them. We observe that the 'Guard Charges' collected is in the form of penalty for not taking the physical possession within the stipulated time framed by the Appellant and no underlying service is involved in the instant case. Accordingly, we hold that the Appellant is not liable to pay service tax on the compensations received as guarding charges from the allottees of the flats. Hence, we set aside the demand confirmed under the category of "security agency service" on the amount received by the appellant as 'Guarding Charges'.
15. Regarding the order for recovery of Cenvat Credit amounting to Rs.2,71,320/- , we observe that the appellant have paid Service Tax of Rs. 2,71,320/- along with interest of Rs. 1,85,345/-, and 25% penalty amounting to Rs. 67,830/-, as per second proviso to Section 78 of the Finance Act, 1994 on 26.05.2011. The appellant also submitted the copy of the challan dated 26.05.2011, Page 20 of 21 Appeal No.: ST/75751/2017-DB evidencing the payment. Thus, we observe that the issue is not contested by the appellant and hence we uphold the demand confirmed in this regard and appropriate the payments made by the appellant towards this liability. As the appellant have already paid Service Tax of Rs. 2,71,320/- along with interest of Rs. 1,85,345/-, and 25% penalty amounting to Rs. 67,830/-, no further payment is warranted.
16. Regarding invocation of extended period of limitation to confirm the demand, we observe that there was no suppression of facts in the instant case as the matter involves interpretation of statutory provisions and that Appellant acted on a bona fide belief that CENVAT credit could be availed on input services received prior to Notification No. 1/2006 - ST becoming effective and no service tax was payable in respect of the other issues for the reasons mentioned hereinabove. It is a settled position of law that when the matter involves interpretation of statutory provisions and the assesse acted on a bona fide belief, extended period of limitation cannot be invoked. In support of this view, we rely upon the decisions of the Hobble Apex Court in the case of Padmini Products vs. Collector of Central Excise. [1989 (43) E.L.T. 195 (S.C.)]. Accordingly, we hold that the demands confirmed by invoking extended period of limitation in the impugned order is liable to be set aside. For the same reason, we hold that no penalty imposable on the appellant and hence we set aside all the penalties imposed on the appellant.
17. In view of the above findings, we pass the following order:
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(i)We set aside the demand of service tax of Rs.
16,06,922/- confirmed in the impugned order, by denying the benefit of the Exemption Notification No 18/2005- ST dated 07.06.2005 , for the amount received after issuance of the Notification no. 1/2006 -ST dated 01.03.2006.
(ii) We set aside the demand of Rs.2,42,413/-
confirmed towards "Repair & Maintenance"service in the impugned order.
(iii) We set aside the demand of Rs.23,58,945/-
confirmed under "Club & Association Service" in the impugned order.
(iv) We set aside the demand of Rs.22,817/-
confirmed under "Security Service", in the impugned order.
(v) Regarding the order for recovery of Cenvat credit, the appellant have already paid Service Tax of Rs. 2,71,320/- along with interest of Rs. 1,85,345/-, and 25% penalty amounting to Rs. 67,830/-. Hence, no further payment is warranted.
(vi) All penalties imposed on the appellant are set aside.
(vii) The appeal filed by the appellant is disposed on the above terms.
(Operative part of Order was pronounced in Open court) (ASHOK JINDAL) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) rkp