Custom, Excise & Service Tax Tribunal
Allahabad Development Authority vs Ce & Cgst Allahabad on 3 March, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.52436 of 2015
(Arising out of Order-in-Original No.(ST-143/2014)10 of 2015 dated
24/03/2015 passed by Commissioner of Customs, Central Excise & Service
Tax, Allahabad)
M/s Allahabad Development Authority, .....Appellant
th
(7 Floor, Indira Bhawan Civil Lines, Allahabad-211001)
VERSUS
Commissioner of Central Excise, Allahabad ....Respondent
(38 MG Marg, Civil Lines, Allahabad-211001)
APPEARANCE:
Shri Sanjay Khanduja, Chartered Accountant for the Appellant
Smt Chitra Srivastava, Authorised Representative for the Respondent
HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL)
CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.70101/2025
DATE OF HEARING : 22 November, 2024
DATE OF PRONOUNCEMENT : 03 March, 2025
SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Original No.(ST-
143/2014)10 of 2015 dated 24/03/2015 passed by
Commissioner of Customs, Central Excise & Service Tax,
Allahabad. By the impugned order following has been held:-
"ORDER
(i) I confirm the demand of Rs. 3,51,34,251/- (Rupees
Three Crores Fifty One Lakhs Thirty Four Thousand Two
Hundred and Fifty One Only) including Education Cess and
Secondary & Higher Education Cess for the period 2009-10
to 2013-14, upon M/s Allahabad Development Authority,
Allahabad, and order for recovery of the same under the
provisions of proviso to Sub-Section (1) of Section 73 read
with Section 73 (2) of Chapter V of the Finance Act, 1994.
Service Tax Appeal No.52436 of 2015
2
(ii) I order for charging Interest at the appropriate rate
under the provisions of Section 75 of the Finance Act, 1994
on the amount of Service Tax confirmed at (i) above.
(iii) I impose a further penalty of Rs. 5000/- (Five
Thousand Only) under Section 77 (2) of the Finance Act,
1994 on the party for their failure to file ST-3 Returns for
the relevant period.
(iv) For their failure to obtain service tax registration under
'Construction of Complex Service', I impose a penalty of
Rs.10000/- (Ten Thousand Only) under the provisions of
Section 77 (1) (a) of the Act, on M/s Allahabad.
(v) Development Authority, Allahabad. I also impose a
penalty of Rs. 3,51,34,251/- (Rupees Three Crores Fifty
One Lakhs Thirty Four Thousand Two Hundred and Fifty
One Only), upon M/s Allahabad Development Authority,
Allahabad under the provisions of Section 78 of the
Finance Act, 1994."
2.1 Appellant is engaged in providing services of construction
of complex and as they had not discharged their service tax as
detailed in table bellow:-
Year Amount Amount Amount Amount Total Service Tax
received received received on receive Amount in
from from repair, d toward Rs.
Constructio completion alteration S
n of new and finishing etc. in Mandap
residential services in relation to a Keepin
complex relation to a residential g, if any
residential complex,
complex, whether or
whether or not new
not new
2009- 193233265 NIL NIL NIL 193233265 1,99,03,026
10 @ 10.30%
2010- 18787816 NIL NIL NII 18787816 19,35,145
11 @ 10.30 %
2011- 80193835 NIL NIL NIL 80193835 82,59,965
12 @ 10.30 %
2012- 40745270 NIL NIL NIL 40745270 50,36,115
13 @ 12.36 %
2013- NIL NIL NIL NIL NIL
14
Service Tax Appeal No.52436 of 2015
3
TOTAL 332960186 332960186 3,51,34,251
2.2 Show cause noticed dated 16.10.2014 was issued to the
appellant asking them to show cause as to why-
"a) The Service Tax amount of Rs. 3,51,34,251/- (Three
crores fifty one lakhs thirty four thousand two hundred and
fifty one including Education Cess Secondary and Higher
Education Cess), should not be demanded and recovered
from them under the provisions of proviso to sub section
(1) of Section 73 of the Finance Act, 1994 and;
b) Interest at the applicable rate should not be demanded
and recovered from them under Section 75 of the Act, ibid
on the amount of service tax being demanded at point (a)
above.
c) Penalty should not be imposed upon them under Section
77 of the Act for violation of provisions of Section 67, 69
and 70 read with Rule 4 and 7 of the Rules and Rule 3 of
Valuation Rules.
d) Penalty should not be imposed upon them under
provisions of Section 76 of the Act for violation of Section
68 read with Rule 6 of the Rules and
e) Penalty should not be imposed upon then under the
provisions of Section 78 of the Act. for having committed
suppression of facts with intent to evade payment of
service tax."
2.3 The said show cause notice was adjudicated as per the
Order-in-Original dated 24.03.2015 referred in para 1 above.
2.4 Aggrieved appellant have filed this appeal.
3.1 We have heard Shri Sanjay Khanduja, learned Chartered
Accountant appearing for the appellant and Smt Chitra
Srivastava learned Authorised Representative appearing for the
revenue.
Service Tax Appeal No.52436 of 2015
4
3.2 Arguing for the appellant learned Counsel submits that
appellant is a Government or a local authority and hence would
be exempt from payment of service tax. Reliance is placed on
clarifications regarding services provided by government or a
local authority, any service provided by the Government or a
local authority to a business entity, issued by the Press
Information Bureau, Government of India, New Delhi dated 14
April, 2016.
3.3 Learned Authorized Representative reiterates the findings
recorded in the orders of the lower authorities.
4.1 We have considered the impugned orders along with the
submissions made in appeal and during the course of argument.
4.2 For holding against the appellant, impugned order records
as follows:-
"5.2 I find that the case of the department is that the
party are providing services of "construction of complex".
On discreet investigation conducted by the department, it
was observed that the services provided by the party,
were liable to service tax and appropriately classifiable
under "construction of complex service", defined under
Section 65(30a) of the Finance Act, 1994 and therefore the
gross amount of Rs.33,29,60,186/-received by the party,
during the period from 2009-10 to 2013-14 was taxable,
on which the party were liable to pay service tax
amounting to Rs.3,51,34,251/- (including cess).
5.3 The party has contested the impugned demand on the
ground that the services provided by it are not covered
under the "construction of complex service" (defined under
Section 65(30a) of the Finance Act, 1994) in terms of
Explanation to Section 65 (105) (zzzh) of the Act. They
have contended that ADA constructs its properties after
purchasing land under the guidelines of the Uttar Pradesh
Land Acquisition Act. Following the purchase of land the
construction is commenced after the preparation of a site
plan according to the Zonal Master Plan. Thereafter the
Service Tax Appeal No.52436 of 2015
5
flats or houses are constructed by ADA itself with its own
resources. Subsequent to completion of construction, the
ready built houses or flats are sold to buyers against a
registered deed executed by ADA in favour of the buyer.
The party has emphasized that the residential units were
sold by them after total completion of the residential
complex. The party have further stated that they are a
"Government Authority" in terms of Notification No.
2/2014-ST dated 30.01.2014 and are thus eligible for
exemption under Notification No. 25/2012-ST dated
20.06.2012. Further notwithstanding these arguments, the
party have also contended that for the purpose of
computation of the gross taxable value, they are eligible
for abatement under Notification No. 1/2006-ST dated
01.03.2006, as amended.
5.4 In the above backdrop, I find that the issues to be
decided by me in the present case are as under:
(i) whether the services provided by the party are covered
under the purview of service tax and appropriately
classifiable under "construction of complex service"?
(ii) whether the party are eligible for exemption under
various notifications, as claimed by them?
(iii) whether the show cause notice has been rightly issued
to the party under extended period provision?
(iv) whether the demand of service tax is maintainable,
interest is leviable and proposal for imposition of penalties
justified?
6.0 First, I take up the issue of taxability of service
rendered by the party and its classification. For proper
appreciation of the case and to arrive at the correct
conclusion, it is imperative to visit the relevant provisions
contained in the statute and the facts of the instant case.
It has not been disputed that Allahabad Development
Authority (ADA), are interalia, engaged in construction of
residential complexes and sale thereof. I have gone
Service Tax Appeal No.52436 of 2015
6
through the allegations contained in the impugned SCN,
which intend to classify the services rendered by the party
under the "construction of complex service and thus it
becomes important to visit the statutory provisions related
to the said service.
6.1 Section 65 (30a) of the Finance Act, 1994 defines
"construction of complex "as follows:-
"construction of complex" means-
(a) construction of a new residential complex or a part
therecf; 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;
6.2 The term "residential complex" is defined in Section
65(91a) of the Act as follows:
"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.
Service Tax Appeal No.52436 of 2015
7
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;
6.3 Taxable service in respect of construction of complex
has been defined under Section 65 (105) (zzzh), whereby,
"taxable service" means any service provided or to be
provided to any person, by any other person, in relation to
construction of complex;
6.4 An explanation was inserted w.e.f. 01.07.2010 under
sub-clause (zzzh) of clause (105) of Section 65 of the Act,
which reads as under: 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;
6.5 Further, the issue of taxability with regard to
"construction of complex service" has been explained and
clarified by the CBEC vide Circular D.O.F. No. 334/1/2010-
TRU, dated 26-2-2010, the relevant extract of which is
reproduced as under:
Government of India
Ministry of Finance (Department of Revenue)
Central Board of Excise & Customs, New Delhi
Tax Research Unit
Service Tax Appeal No.52436 of 2015
8
Subject: Changes proposed in Service tax law and
procedure in Union Budget 2010-11-Regarding.
........................................
...............................................
8. Service tax on construction services 8.1 The service tax on construction of commercial or industrial construction services was introduced in 2004 and that on construction of complex was introduced in 2005.
8.2 As regards payment made by the prospective buyers/flat owners, in few cases the entire consideration is paid after the residential complex has been fully developed. This is in the nature of outright sale of the immovable property and admittedly no Service tax is chargeable on such transfer. However, in most cases, the prospective buyer books a flat before its construction commencement/completion, pays the consideration in installments and takes possession of the property when the entire consideration is paid and the construction is over.
8.3 In some cases the initial transaction between the buyer and the builder is done through an instrument called 'Agreement to Sell‟. At that stage neither the full consideration is paid nor is there any transfer in ownership of the property although an agreement to ultimately sell the property under settled terms is signed. In other words, the builder continues to remain the legal owner of the property. At the conclusion of the contract and completion of the payments relating thereto, another instrument called 'Sale Deed' is executed on payment of appropriate stamp duty. This instrument represents the legal transfer of property from the promoter to the buyer.
8.4 In other places a different pattern is followed. At the initial stage, instruments are created between the promoter and all the prospective buyers (which may include a person who has provided the vacant land for the Service Tax Appeal No.52436 of 2015 9 construction), known as 'Sale of Undivided Portion of The Land'. This instrument transfers the property right to the buyers though it does not demarcate a part of land, which can be associated with a particular buyer. Since the vacant land has lower value, this system of legal instrumentation has been devised to pay lesser stamp duty. In many cases, an instrument called 'Construction Agreement' is parrallely executed under which the obligations of the promoter to get property constructed and that of the buyer to pay the required consideration are incorporated.
8.5 These different patterns of execution, terms of payment and legal formalities have given rise to confusion, disputes and discrimination in terms of Service tax payment.
8.6 In order to achieve the legislative intent and bring in parity in tax treatment, an Explanation is being inserted to provide that unless the entire payment for the property is paid by the prospective buyer or on his behalf after the completion of construction (including its certification by the local authorities), the activity of construction would be deemed to be a taxable service provided by the builder/promoter/developer to the prospective buyer and the Service tax would be charged accordingly. This would only expand the scope of the existing service, which otherwise remain unchanged.
[Emphasis added] 6.6 The party have also raised the issue of abatement under notification no. 1/2006-ST dated 1.3.2006. The aforesaid notification grants exemption in the form of abatement of taxable value equal to 67 per cent of the total taxable value, on which service tax under construction of complex service is otherwise payable. In effect, only 33 per cent of the taxable value is subjected to service tax at the prescribed rate. This exemption however does not apply to cases where the taxable services Service Tax Appeal No.52436 of 2015 10 provided are only completion and finishing services in relation to residential complex, referred to in sub-clause
(b) of clause (30a) of section 65 of the Finance Act.
The exemption is also not available if the service provider has (i) taken Cenvat Credit of duty on inputs or capital goods used for providing taxable service; or (ii) taken Cenvat credit of service tax on input services used for providing taxable service; or (iii) availed exemption on cost of goods and materials sold to the recipient of the service, in terms of Notification No.12/2003-ST dated 20.6.2003.
6.7 This notification No. 1/2006-ST dated 1.3.2006 was amended vide Notification No. 29/2010-ST dated 22.06.2010, effective from 01.07.2010, wherein the abatement was increased to 75% of the gross taxable value, subject to a further condition that this exemption shall not apply in cases where the taxable services provided are only completion and finishing services in relation to residential complex, referred to in sub-clause
(b) of clause (30a) of section 65 of the Finance Act.
6.8 The provisions contained in the Finance Act, 1994, underwent a sea change vide the Finance Act, 2012, with the enactment of new provisions with regard to the "declared services and the "negative list and the Introduction of Mega Exemption vide Notification No. 25/2012-ST dated 20.06.2012, effective from 01.07.2012. Of the new provisions, the ones relevant to the instant case, are enumerated as under:
(i) "Declared service" has been defined under clause (22) of Section 65B of the Act, which "means any activity carried out by a person for another person for consideration and declared as such under section 66E."
(ii) Section 66E of the Act specifies the various declared services, the relevant extract is as under:
"The following shall constitute declared services, namely -
Service Tax Appeal No.52436 of 2015 11
(a) renting of immovable property
(b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion certificate by the competent authority. Explanation- For the purposes of this clause, -
(I) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:-
(A) architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972); or Institution of (B) chartered engineer registered with the Engineers (India); or (C) licensed surveyor of the respective local body of the city or town or village or development or planning authority;
(II) the expression "construction" includes additions, alterations, replacements or remodelling of any existing civil structure;
[Emphasis supplied] 6.9 Consequent upon amendment to the Finance Act, 1994, as enumerated above, exemption Notification No. 25/2012-ST dated 20.06.2012, also called the Mega Notification, effective from 01.07.2012, was issued, which exempts the specified taxable services from the whole of the service tax leviable thereon under section 66B of the said Act. The extract relevant to the present case reads as under:
"12. Services provided to the Government, a local authority or a governmental authority by way of Service Tax Appeal No.52436 of 2015 12 construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation , or alteration of -
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;
(b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);
(c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment;
(d) canal, dam or other irrigation works;
(e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or
(iii) sewerage treatment or disposal; or (1) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 658 of the said Act;
13. Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-
(a) a road, bridge, tunnel, or terminal for road transportation for use by general public;
(b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;
(c) a building owned by an entity registered under section 12AA of the Income tax Act, 1961(43 of 1961) and meant predon inantly for religious use by general public;
Service Tax Appeal No.52436 of 2015 13
(d) a pollution control or effluent treatment plant, except located as a part of a factory; or a structure meant for funeral, burial or cremation of deceased;
14. Services by way of construction, erection, commissioning, or installation of original works pertaining to,-
(a) an airport, port or railways, including monorail or metro;
(b) a single residential unit otherwise than as a part of a residential complex;
(c) low-cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;
(d) post-harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or
(e) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages;"
[Emphasis added] 6.10 Notification No. 26/2012-ST dated 20.06.2012, effective from 01.07.2012, grants exemption in the form of abatement of taxable value equal to 75 per cent of the total taxable value on which service tax is otherwise payable. In effect, only 25 per cent of the taxable value will be subjected to service tax at the prescribed rate on construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority. This exemption is available subject to the Service Tax Appeal No.52436 of 2015 14 condition (i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004. (ii) the value of land is included in the amount charged from the service receiver. Furthermore, it has also been provided that the amount charged shall be the sum total of the amount charged for the service including the fair market value of all goods and services supplied by the recipient(s) in or in relation to the service, whether or not supplied under the same contract or any other contract, after deducting- (a) the amount charged for such goods or services supplied to the service provider, if any; and (b) the value added tax or sales tax, if any, levied thereon.
6.11 Having elaborately discussed all the provisions of law and CBEC Circular relevant to the "construction of complex service", I now return to the issue of classification of service rendered by the party to its clients, wherein it builds flats and houses. The party has itself stated that it constructs residential properties after purchasing land and preparation of a site plan. The party goes on to state that it constructs houses/ flats out of its own resources and then sells it to its buyers against execution of a registered deed in favour of the buyer.
Going by the provisions of law discussed very elaborately earlier and the self acknowledged construction activity carried out by the party, I conclude that that the activity carried out by the party in relation to houses/ flats it builds and sells, is rightly classifiable under "construction of complex service". In my view, there is no ambiguity or confusion as to the classification of service rendered by the party when it builds flats/ houses for its buyers.
7.0 A question has been raised that service provided by the Government, in this case ADA, are exempt from service tax. It is pertinent to mention herein that prior to 01.07.2012, the CBEC had issued a Circular No. 96/7/2007-ST dated 23.08.2007, clarifying that sovereign/ Service Tax Appeal No.52436 of 2015 15 public authorities perform functions assigned to them under the law in force, known as statutory functions. These functions performed by them cannot be considered as service as they are purely in public interest and are undertaken as mandatory or statutory functions. Therefore, service tax was not leviable on such services rendered by them. For the period after 01.07.2012, Section 66E [Declared services] declares certain services as taxable services. These services even if provided by Government or local authorities are liable to be considered as a taxable service. The section does not make any exception for services provided by Government or local authorities. It is pertinent to mention herein that Section 66D of the Act [Negative List], in clauses (a) to (q), specifies certain services on which no tax is payable under Section 668 of the Act ibid. None of the clauses relates to construction service. Therefore, service tax is payable without exception on construction service, except those specifically exempted under the Mega Notification [25/2012-ST dated 20.06.2012].
7.1 The impugned demand on "construction of complex service" rendered by the party has been issued covering the period 2009-10 to 2013-14. For the period prior to 01.07.2012, there was no exemption whatsoever in respect of the services provided by the Government, except those in respect of discharge of their sovereign/ statutory functions performed in public interest. Clearly the activity of building/ selling flats and houses by ADA cannot be treated as discharge of statutory / sovereign function by the government. For the period after 01.07.2012, "Construction of Complex Service" has been explicitly included in Section 66E of the Act as a "declared service".
Furthermore, with regard to the exemption granted under the Mega Notification [25/2012-ST dated 20.06.2012), it is explicit therein that "services provided to the Government, a local authority or a governmental authority by way of, Service Tax Appeal No.52436 of 2015 16 interalia, construction, installation, completion, fitting out, repair, maintenance, renovation etc. are exempt". The Mega Exemption notification does not exempt service in respect of construction provided by the Government, a local authority or a governmental authority. Thus clearly the construction of complex service rendered by ADA is not entitled for any exemption for the entire period of demand.
7.2 In fact, in the entire scheme of taxability of "construction service" envisaged in the Finance Act, 1994, for the period prior to as well as after 01.07.2012, only one exception from taxability has been created in the statute, and that is in the case when the builder collects the entire sum against the residential complex from the buyers after the grant of completion certificate from the authority competent to issue such certificate. In such cases the construction service shall not be taxable. The intent of the said provision is that in case a builder receives the entire consideration against the sale of residential units from the buyers after the grant of completion certificate by the competent authority, the service shall not be taxable as it shall be deemed to be an outright sale. In any other case, in which the buyer and the builder enter into contracts/ agreement known under whatever nomenclature, the service shall be taxable.
In the instant case, the party have consistently pleaded that they sell the flats after completion of construction and only when the completion certificate is granted by the relevant authority. It is the party's contention that since they 'sell' the flats outright to buyers, there is no question of service being provided. However, the assertion of the party is patently incorrect, inasmuch as, the Finance Controller & Chief Accounts Officer of ADA, Shri Dharmendra Prakash Tripathi, in his letter dated 03.07.2014, addressed to the Assistant Commissioner, Anti-Evasion, Central Excise, Allahabad, has, interalia, stated that "the amounts received against construction by Service Tax Appeal No.52436 of 2015 17 ADA is received in EMI (Equated Monthly Installment) from purchaser over a considerable number of years". From the assertion made by the officer of ADA, it is clear that the party do not sell the flats built by them outright, as is being claimed by them. Rather, it appears, that they sell their flats on EMI scheme, wherein the buyers are required to pay installments towards the cost of the flat as per pre- decided schedule. Now such instances where sums are received by the builder from the client before the grant of completion certificate by the competent authority are clearly liable to be treated as amounts to rendering of "construction of complex service" by the builder, in view of Explanation to sub clause (zzzh) of clause (105) of Section 65 of the Act (refer Para 6.4). Now, since, as per the assertion made by the officer of ADA on his own to the effect that amounts received by ADA against construction are received in EMI over considerable period of years, it is clear that the argument made by ADA, that they sell flats to their clients uprightly, is factually incorrect. The truth is, that they sell flats to their clients under EMI scheme, and such instances, as discussed earlier fall in the ambit of "construction of complex service" and are accordingly taxable. Moreover, other than the assertion, I find that the party have not given any documents or evidence to substantiate their contention that they receive the entire consideration after completion of flats. Hence, the party's contention is erroneous and not sustainable and thus I reject the same, 8.0 Notwithstanding the above, the party have raised a contention that they are eligible for abatement from the gross value for the purpose of computation of demand, as envisaged under Notification No. 1/2006-ST, as amended. Contrary to the party's assertion, I find that the abatement provided under Notification No. 1/2006-ST dated 1.3.2006, as amended vide Notification No. 29/2010-ST dated 22.06.2010, effective from 01.07.2010 and Notification No. Service Tax Appeal No.52436 of 2015 18 26/2012-ST dated 20.06.2012, effective from 01.07.2012, provide for certain specific conditions, subject to which alone, the abatement can be allowed. The notifications and the conditions specified therein have been discussed in detail in the preceding paras.
I find that during the entire period of demand ie. 2009-10 to 2013-14, the party has not submitted any proof of having fulfilled the said conditions. Thus I hold that the party are not entitled to the benefit of notification as they have not submitted any proof of having fulfilled the specified conditions.
9.0 It is amply clear from the facts of the case and above cited statutory provisions contained in the Finance Act, 1994 as well as elaborate discussions that the services provided by the party by way of construction of complexes is chargeable to service tax during the material time and appropriately classifiable under "Construction of Complex Service". Therefore, I hold that the party is liable to pay service tax amounting to Rs.3,51,34,251/-(including cess) on gross taxable value Rs.33,29,60,186/- received by them during the period 2009-10 to 2013-14. It is important to mention here that the figure of Rs.33,29,60,186/-received by the party, has been provided by the party themselves.
10.0 As regards the allegation of suppression of facts for Invoking the extended period for demand under proviso of section 73 (1) of the Finance Act 1994 in the SCN, I observe that had the documents of the party not been examined and checked, the Department would never have come to know the details of construction of complex services provided by the party. The party has neither obtained service tax registration nor paid any service tax nor submitted any information to the department. Therefore, I hold that the present case is a case of deliberate non-declaration and suppression of vital facts from the department with willful intention to evade Service Tax Appeal No.52436 of 2015 19 payment of service tax. Accordingly, I hold that the invocation of the extended period for demand of service tax, under proviso of Section 73 (1) of the Act in this case is fully justified and therefore I confirm the demand of service tax (including cess) of Rs. 3,51,34,251/- under the provisions of proviso to section 73 (1) of Finance Act, 1994.
11.0 As regards charging of interest on the service tax amounts being confirmed, I find that Section 75 of the Finance Act, 1994 provides that every person, liable to pay the tax in accordance with the provisions of section 68 or rules made there under, who fails to credit the tax or any. part thereof to the account of the Central Government within the period prescribed, shall pay simple interest at such rate not below ten per cent and not exceeding thirty- six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, for the period by which such crediting of tax or any part thereof is delayed. I find that the Hon'ble Bombay High Court (DB) in the case of CCE vs. Padmashri VV Patil SSK Ltd. reported in 2007 (215) ELT 23 (Bom.-HC-DB) held that- Interest is civil liability of assessee who has retained amount of public money. Interest is mandatory, even if evasion of duty is not mala fide or intentional.. The CESTAT in the case of Sree Vadivambigai Textile Mills Ltd vs. CCE [2005] 1 STT 72 (Chen.-CESTAT) held that levy of interest under section 75 is mandatory and no leniency can be shown merely because appellant has been declared as sick company. I also find that CESTAT in the case of Ballarpur Industries Ltd vs. Commissioner of C.Ex. Nagpur 2007 (5) STR-197 (Tri.-Mumbai) held that the provisions of section 75 prescribing interest on service tax paid belatedly are mandatory and therefore the appellants are liable to pay interest. I also find that CESTAT in the case INMA International Security Academy (P) Ltd. vs. CCE [2005] 1 STT 31 (Chennai-CESTAT) held that the liability Service Tax Appeal No.52436 of 2015 20 to pay interest at prescribed rate, for delayed payment of dues, was inescapable as the law did not confer any discretion in the matter of levying interest.
11.1 From the above it is clear that interest is liable to be paid by the party at appropriate rates under the provisions of Section 75 of the Finance Act, 1994, on the amount of service tax being confirmed."
4.3 The issue involved in the present case is squarely covered by the decision of Hon'ble jurisdictional Allahabad High Court in the case of Greater Noida Industrial Development Authority 2015 (40) STR 95 (All.) by holding as follows:-
"1-29 .....................................
30. It is left open to the appellant to raise all such legal as well as factual issues in respect of the second show cause notice dated 17th October, 2012 during remand de novo proceedings.
The plea of the appellant that it is performing statutory duties and is a creation of a statute and therefore cannot be subjected to Service Tax does not appeal to us. Suffice is to mention that the Finance Act, 1994 makes no distinction between a statutory body i.e. a juristic person and an individual.
31. As far as the circular dated 23rd August, 2007 issued by the Government of India, which has been so heavily relied upon by the appellant is concerned, we may record that under Clause 032.01, it has been provided that the Prasar Bharati Corporation (Doordarshan and All India Radio), which has been constituted under the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 is liable to pay Service Tax for broadcasting services.
32. Similarly under Clause 999.01 with regard to the sovereign/public duties/functions, it has been clarified that activities assigned to and performed by the sovereign/public authorities under the provisions of any law are statutory duties. The fee or amount collected as Service Tax Appeal No.52436 of 2015 21 per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy and are deposited into the Government account. Such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. Therefore, such activities assigned to be performed by a sovereign/public authority under the provisions of any law, do not constitute taxable services. Any amount/fee collected in such cases are not to be treated as consideration for the purposes of levy of Service Tax.
33. However, if a sovereign/public authority provides a services, which is not in the nature of an statutory activity and the same is undertaken for a consideration (not a statutory fee), then in such cases, Service Tax would be leviable as long as the activity undertaken falls within the scope of a taxable service as defined."
4.5 In view of the above referred decision of Hon'ble Jurisdictional High Court in our view, the order of Commissioner (Appeals) cannot be faulted to this extent. Similar order has been passed by Mumbai Bench of this Tribunal in the case of M/s CIDCO Ltd. 2015 (37) STR 122 (Tribunal-Mumbai). Similar view has been expressed by Delhi Bench of this Tribunal in the cases of M/s NEW OKHLA INDUSTRIAL DEVELOPMENT AUTH. 2015 (39) STR 443 (Tri.-Delhi) & M/s Bhilai Steel Plant 2022 (61) GSTL 56 (Tri.-Delhi).
4.6 The decision of the Tribunal in case Greater Noida Industrial Development Authority [2015 (38) STR 1062 (Tri.- Del.)] has not been agreed to by the larger bench of Tribunal in case of Rajasthan State Industrial Development and Investment Corporation Ltd. [INTERIM ORDER NO‟s. 1/2025 & 1/2025 dated 27.01.2025 in Service Tax Appeal No 50553 of 2017 and Service Tax Appeal No. 89766 of 2013 (Mumbai Bench)] and Larger Bench has observed settled the issue stating as follows:
Service Tax Appeal No.52436 of 2015 22 "31. In Greater Noida Industrial Development Authority, this issue was examined in paragraph 10.1 of the judgment, which paragraph has been reproduced above. In paragraph 16 of the judgment, the Division Bench noticed that in Panbari Tea the Supreme Court drew a distinction between premium and rent, but then proceeded to hold that since the taxing event under section 65(105)(zzzz) of the Finance Act is "renting of immovable property", service tax would be leviable only on the element of rent and not on the value of "premium" or "salami".
The Division Bench failed to notice that the definition of "renting of immovable property" includes „leasing‟, which under section 105 of the Transfer of Property Act includes both premium and periodical rent.
32. The Division Bench of the Tribunal in Kagal Nagar Parishad merely followed the earlier decision of the Tribunal in Greater Noida Industrial Development Authority.
33. In view of the fact that „lease‟, as defined under section 105 of the Transfer of Property Act, includes both the one time premium amount and the periodical rent amount, it has to be held that the one time premium amount received by the lessor from the lessee for transfer of interest in the property would be leviable to service tax under section 65(105)(zzzz) of the Finance Act.
34. It is, therefore, not possible to accept the view expressed by the two Division Benches of the Tribunal in Greater Noida Industrial Development Authority and Kagal Nagar Parishad.
........
49. In view of the aforesaid discussion, the inevitable conclusion that follows is that the value of "premium" during the period prior to 01.07.2012 and during the Service Tax Appeal No.52436 of 2015 23 period w.e.f. 01.07.2012 would be exigible to service tax under "renting of immovable property".
50. The reference would, therefore, have to be answered in the following manner:
"The value of "premium" or "salami" is exigible to service tax under "renting of immovable property"
for the period prior to 01.07.2012 under section 65(105)(zzzz) of the Finance Act and from 01.07.2012 under section 66B of the Finance Act."
4.7 Hon'ble Supreme Court has in case of Krishi Upaj Mandi Samiti [2022 (58) G.S.T.L. 129 (S.C.)] observed as follows:
"6. At the outset, it is required to be noted that the respective Market Committees are claiming exemption under the 2006 circular. The exemption circular issued by the Board reads as under :-
Circular No. 89/7/2006, dated 18-12-2006 :-
"A number of sovereign/public authorities (i.e., an agency constituted/set up by Government) perform certain functions/duties, which are statutory in nature. These functions are performed in terms of specific responsibility assigned to them under the law in force. For examples, the Regional Reference Standards Laboratories (RRSL) undertake verification, approval and calibration of weighing and measuring instruments; the Regional Transport Officer (RTO) issues fitness certificate to the vehicles; the Directorate of Boilers inspects and issues certificate for boilers; or Explosive Department inspects and issues certificate for petroleum storage tank, LPG/CNG tank in terms of provisions of the relevant lows. Fee as prescribed is charged and the same is ultimately deposited into the Government Treasury.
A doubt has arisen whether such activities provided by a sovereign/public authority required to be provided under a statute can be considered as „provision of service‟ for the purpose of levy of service tax.
Service Tax Appeal No.52436 of 2015 24
2. The issue has been examined. The Board is of the view that the activities performed by the sovereign/public authorities under the provision of law are in the nature of statutory obligations which are to be fulfilled in accordance with law. The fee collected by them for performing such activities is in the nature of compulsory levy as per the provision of the relevant statute, and it is deposited into the Government treasury. Such activity is purely in public interest and it is undertaken as mandatory and statutory function. These are not in the nature of service to any particular individual for any consideration. Therefore, such an activity performed by a sovereign/ public authority under the provisions of law does not constitute provision of taxable service to a person and, therefore, no service tax is leviable on such activities.
3. However, if such authority performs a service, which is not in the nature of statutory activity and the same is undertaken for consideration not in the nature of statutory fee/levy, then in such cases, service tax would be leviable, if the activity undertaken falls within the ambit of a taxable service."
7. As per the exemption circular only such activities performed by the sovereign/public authorities under the provisions of law being mandatory and statutory functions and the fee collected for performing such activities is in the nature of a compulsory levy as per the provisions of the relevant statute and it is deposited into the Government Treasury, no service tax is leviable on such activities. In paragraph 3, it is also specifically clarified that if such authority performs a service, which is not in the nature of a statutory activity and the same is undertaken for consideration, then in such cases, service tax would be leviable, if the activity undertaken falls within the ambit of a taxable service. Thus, the language used in the 2006 circular is clear, unambiguous and is capable of determining a defined meaning.
Service Tax Appeal No.52436 of 2015 25
8. The exemption notification should not be liberally construed and beneficiary must fall within the ambit of the exemption and fulfil the conditions thereof. In case such conditions are not fulfilled, the issue of application of the notification does not arise at all by implication.
8.1 It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the Court to ignore the conditions prescribed in the relevant policy and the exemption notifications issued in that regard.
8.2 The exemption notification should be strictly construed and given a meaning according to legislative intendment. The Statutory provisions providing for exemption have to be interpreted in light of the words employed in them and there cannot be any addition or subtraction from the statutory provisions.
8.3 As per the law laid down by this Court in a catena of decisions, in a taxing statute, it is the plain language of the provision that has to be preferred, where language is plain and is capable of determining a defined meaning. Strict interpretation of the provision is to be accorded to each case on hand. Purposive interpretation can be given only when there is an ambiguity in the statutory provision or it results in absurdity, which is so not found in the present case.
8.4 Now, so far as the submission on behalf of the respondent that in the event of ambiguity in a provision in a fiscal statute, a construction favourable to the assessee should be adopted is concerned, the said principle shall not be applicable to construction of an exemption notification, when it is clear and not ambiguous. Thus, it will be for the assessee to show that he comes within the purview of the Service Tax Appeal No.52436 of 2015 26 notification. Eligibility clause, it is well settled, in relation to exemption notification must be given effect to as per the language and not to expand its scope deviating from its language. Thus, there is a vast difference and distinction between a charging provision in a fiscal statute and an exemption notification.
9. In the present case, it is the case on behalf of the appellants that the activity of rent/lease/allotment of shop/land/platform/space is a statutory activity and the Market Committees are performing their statutory duties cast upon them under Section 9 of the Act, 1961 and therefore they are exempted from payment of service tax on such activities.
The aforesaid submission seems to be attractive but has no substance. Section 9(2) is an enabling provision and the words used is "market committee may". It is to be noted that in so far as sub-section (1) of Section 9 is concerned, the word used is "shall". Therefore, wherever the legislature intended that the particular activity is a mandatory statutory, the legislature has used the word "shall". Therefore, when under sub-section (2) of Section 9, the word used is "may", the activities mentioned in Section 9(2)(xvii) cannot be said to be mandatory statutory duty and/or activity. Under Section 9(2), it is not a mandatory statutory duty cast upon the Market Committees to allot/lease/rent the shop/platform/land/space to the traders. Hence, such an activity cannot be said to be a mandatory statutory activity as contended on behalf of the appellants. Even the fees which is collected is not deposited into the Government Treasury. It will go to the Market Committee Fund and will be used by the market committee(s). In the facts of the case on hand, such a fee collected cannot have the characteristics of the statutory levy/statutory fee. Thus, under the Act, 1961, it cannot be said to be a mandatory statutory obligation of the Market Committees to provide shop/land/platform on rent/lease. If Service Tax Appeal No.52436 of 2015 27 the statute mandates that the Market Committees have to provide the land/shop/platform/space on rent/lease then and then only it can be said to be a mandatory statutory obligation otherwise it is only a discretionary function under the statute. If it is discretionary function, then, it cannot be said to be a mandatory statutory obligation/statutory activity. Hence, no exemption to pay service tax can be claimed."
This decision has been followed by the Hon'ble Apex Court subsequently in following cases:
Agriculture Produce Marketing Committee Gazipur [(2023) 2 Centax 293 (S.C.)] Gujarat Industrial Development Corporation [(2023) 5 Centax 171 (S.C.)] 4.8 Thus the submission made by the appellant that they are not liable to pay service tax being government authority in respect of the services in dispute, is thus devoid of merits, in view of the above referred decisions.
4.9 However, we find that appellant have claimed benefit of abatement for determination of the value of taxable services provided by them which has been denied for production of sufficient documents admissibility. Denial of such abatement cannot be justified and the value of taxable services needs to be determined after allowing for abatement either under the composition scheme or on the basis of actual documents, if documents produced. The said view is in line with the decision of Hon'ble Supreme Court in the case of M/s Larsen and Toubro Ltd. [2015 (39) S.T.R. 913 (S.C.)] wherein following has been held:-
"24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines "taxable Service Tax Appeal No.52436 of 2015 28 service" as "any service provided". All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will also be noticed that no attempt to remove the non-service elements from the composite works contracts has been made by any of the aforesaid Sections by deducting from the gross value of the works contract the value of property in goods transferred in the execution of a works contract.
25. In fact, by way of contrast, Section 67 post amendment (by the Finance Act, 2006) for the first time prescribes, in cases like the present, where the provision of service is for a consideration which is not ascertainable, to be the amount as may be determined in the prescribed manner.
26. We have already seen that Rule 2(A) framed pursuant to this power has followed the second Gannon Dunkerley case in segregating the „service‟ component of a works contract from the „goods‟ component. It begins by working downwards from the gross amount charged for the entire works contract and minusing from it the value of the property in goods transferred in the execution of such works contract. This is done by adopting the value that is adopted for the purpose of payment of VAT. The rule goes on to say that the service component of the works contract is to include the eight elements laid down in the second Gannon Dunkerley case including apportionment of the cost of establishment, other expenses and profit earned by the Service Tax Appeal No.52436 of 2015 29 service provider as is relatable only to supply of labour and services. And, where value is not determined having regard to the aforesaid parameters, (namely, in those cases where the books of account of the contractor are not looked into for any reason) by determining in different works contracts how much shall be the percentage of the total amount charged for the works contract, attributable to the service element in such contracts. It is this scheme and this scheme alone which complies with constitutional requirements in that it bifurcates a composite indivisible works contract and takes care to see that no element attributable to the property in goods transferred pursuant to such contract, enters into computation of service tax.
27. In fact, the speech made by the Hon‟ble Finance Minister in moving the Bill to tax Composite Indivisible Works Contracts specifically stated :-
"State Governments levy a tax on the transfer of property in goods involved in the execution of a works contract. The value of services in a works contract should attract service tax. Hence, I propose to levy service tax on services involved in the execution of a works contract. However, I also propose an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the works contract."
28. Pursuant to the aforesaid speech, not only was the statute amended and rules framed, but a Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 was also notified in which service providers could opt to pay service tax at percentages ranging from 2 to 4 of the gross value of the works contract.
29. It is interesting to note that while introducing the concept of service tax on indivisible works contracts various exclusions are also made such as works contracts in respect of roads, airports, airways transport, bridges, tunnels, and dams. These infrastructure projects have been excluded and Service Tax Appeal No.52436 of 2015 30 continue to be excluded presumably because they are conceived in the national interest. If learned counsel for the revenue were right, each of these excluded works contracts could be taxed under the five sub-heads of Section 65(105) contained in the Finance Act, 1994. For example, a works contract involving the construction of a bridge or dam or tunnel would presumably fall within Section 65(105)(zzd) as a contract which relates to erection, commissioning or installation. It is clear that such contracts were never intended to be the subject matter of service tax. Yet, if learned counsel for the revenue is right, such contracts, not being exempt under the Finance Act, 1994, would fall within its tentacles, which was never the intention of Parliament."
4.10 Accordingly, for redetermination of value of taxable services, we remand the matter back to the Original Authority after allowing the abatement.
4.11 Demand has been made against the appellant by invoking the extended period of limitation for invoking extended period, impugned order do not record any finding with regards to intention of the appellant to evade payment of due service tax. Appellant being a development authority duly constituted by the Government under Section-4 of the Uttar Pradesh Town Planning and Development Act on 20 August 1974 by the Government's release dated 09-08-1974 to solve the complex housing problem arising out of the pressure of this growing population, cannot be imputed with intention to evade payment off service tax. Hence, we do not find any merits in invocation of extended period of limitation for making this demand. In case of Hindustan Insecticides Ltd [2017 (6) G.S.T.L. 218 (Tri. - Del.)] following has been held:
"12 The time period involved in the present case is from 2005-2006 to 2009-2010. The department has issued various show cause notices on different dates though the total demand confirmed is 3,13,56,315/-. The assessee appellant has given the submission that demand beyond the period of one year is time- barred as the department had Service Tax Appeal No.52436 of 2015 31 the knowledge of the relevant facts. The assessee submits that the fact of receipt of subsidy was reflected in their profit and loss account and balance sheet and they are public sector undertaking therefore there is no question of they having any „intent to evade payment of duty‟; more so, when they have sold entire quantity of DDT manufactured to the Ministry of Health & Family Welfare, Government of India.
12.1CESTAT in the case of CCE, Indore v. Nepa Ltd. - 2013 (298) E.L.T. 225 (Tri.-Del.) . has held that in case of Public Sector Undertaking, it would be absurd to accuse that there was „intention to evade tax‟. CESTAT in the said decision observes as under :
In any case it "8. is seen that the show cause notice has been issued after expiry of normal limitation period of one year from the relevant date and same would not survive unless the Department proves that the respondents had deliberately suppressed the relevant facts from the Department with intent to evade the duty. In this regard we find that the respondent is a Public Sector Undertaking wholly owned by the Government of India and in our view it would be absurd to accuse a wholly Government owned company of non-payment of excise duty with intent to evade the tax. In the circumstances of the case, in our view, it would not be correct to allege that the respondent have suppressed the relevant facts from the Department with intent to evade the payment of duty and as such longer limitation period under proviso of Section 11A(1) and the penalty under Section 11AC would not be applicable. Thus the duty demand is not sustainable on limitation, also."
13.In the light of above discussions, it is held that duty of Central Excise is to be levied on the subsidy portion or (extra consideration/reimbursement received) for the period of only one year from the relevant date, which is the date of the Show Cause Notices. Consequently, the demand of Central Excise duty on the subsidy portion beyond the Service Tax Appeal No.52436 of 2015 32 period of one year cannot be sustained and is hereby dropped. Thus, the demand for the period of one year (from the relevant date) is sustained along with interest. However, for re-quantification of the liability of the demand and interest and penalty if any, the matter is remanded to the adjudicating authority, who shall decide the same afresh within four months of receipt of this order and after giving an opportunity of personal hearing and submission of documents to the assessee."
4.12 In case of Indian Oil Corporation Ltd. [2013 (291) E.L.T. 449 (Tri. - Ahmd.)] "24. As regards extended period of limitation, I find that there is no dispute that the worksheet attached to Show Cause Notice had calculated the amount of differential duty which has to be demanded from the appellant, was in respect of excess sales tax collected. The said details were worked out from the invoices which were raised by the appellant during the relevant period. On perusal of the said invoices, I find that the appellants were showing the amount which has been collected by them in form of sales tax. These will indicate that there was some kind of information given on the invoices to the authorities. Be that it may be, I find strong force in the contention of the ld. Counsel that the appellant being a Public Sector Undertaking, there cannot be mala fide for non-discharge of excise duty, if any and there cannot be allegation of intention to evade duty. I find fortified in my view, by decision of this Tribunal in the case of Markfed Refined Oil & Allied Indus, (supra), wherein the Tribunal held that "We are of the view that in the absence of any material showing any positive intention on the part of the appellant, which is a Government undertaking, to evade duty or fraud, collusion, etc., imposition of penalty was not justified." I find that the Revenue took up the matter in the case of Markfed Refined Oil & Allied Indus. in appeal to Hon‟ble High Service Tax Appeal No.52436 of 2015 33 Court of Punjab & Haryana and their Lordships, while dismissing the appeal, passed the following order :
"The revenue has filed the instant appeal under Section 35G of the Central Excise Act, 1944 challenging order dated 28- 3-2008 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity „the Tribunal‟). The Tribunal has recorded a categorical finding that there is no material brought on record which may lead to an inference that there was any intention to evade duty by playing fraud or collusion. The dealer-respondent is a government undertaking namely Markfed. After recording the aforesaid finding, the order of penalty has been set aside by the Tribunal.
Having heard learned counsel, we find that no exception is provided to interfere in the impugned order in which pure findings of fact have been recorded. Once the dealer- respondent is a Government organisation like Markfed it is not easy to infer any evasion of duty much less its intention to do so. There is thus no merit in the appeal as no question of law warranting its admission would arise. Dismissed".
25.In the case in hand, it is undisputed that the appellant herein had purchased the petroleum products from Reliance Industries Ltd. and have further sold it to their customers as a dealer. It is also undisputed that the appellant is a Public Sector Undertaking. In my considered view, the ratio of case-laws cited by ld. Counsel would squarely apply to this case and I hold that there cannot be any intention of the appellant to evade payment of duty."
4.13 We uphold demand for normal period of limitation subject to our observation in para 4.7 above.
4.14 We set aside the demand made by invoking the extended period for the same reason, we do not find any merits in the penalties imposed on the appellant under Section 78 of the Act. However, the penalties under Section 77(2), 77(1)a of the Service Tax Appeal No.52436 of 2015 34 Finance Act, 1994 which are for the failure to comply with the provisions of the Act and rules are upheld.
5.1 Appeal is partially allowed. Matter is remanded back to the Original Authority for consideration and de-novo adjudication as per the above directions within three months from the date of receipt of this order.
(Order pronounced in open court on- 03 March, 2025) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp