R V Nirman Pvt Ltd. Vs Commissioner of Customs (CESTAT Hyderabad)
M/s R V Nirman Pvt Ltd. appealed against Order-in-Original No. HYD-EXCUS-002-COM-041-16-17 dated 31.10.2016 concerning service tax on construction of residential complexes undertaken under development agreements with land owners. The appellant had undertaken four projects, namely R.V. Brindavanam, R.V. Padma Laxmi, R.V. Avaneendra and R.V. Manyatha. According to the supplied order, all four projects were completed before 01.07.2010 and occupancy certificates were obtained before that date. The appellant had discharged service tax under Construction of Complex Service for certain projects and under the Works Contract Service composition scheme for others.
Following an audit, the Department issued a show cause notice dated 22.06.2012 proposing reclassification under Works Contract Service, demand of service tax on the land owner’s share of flats by invoking the extended period, and penalty under Section 78 of the Finance Act, 1994. The demand was confirmed by the impugned order.
Before the Tribunal, the appellant submitted that construction of residential complexes completed before 01.07.2010 was not taxable and relied upon settled law and CBEC circulars. It also submitted that construction undertaken before execution of sale deeds was in the nature of self-service, that the Department had accepted the classification under Construction of Complex Service in the returns, and that the extended period was not invokable because the relevant facts had been disclosed in ST-3 returns. The learned AR supported the findings of the Commissioner (Appeals) and submitted that service tax was payable on the land owner’s share.
