Swarnandhra IJMII Integrated Township Development Company Private Limited Vs Commissioner of Customs (CESTAT Hyderabad)
The appeal was filed against Order-in-Original No. 07/2008 dated 26.12.2008 passed by the Commissioner of Central Excise and Service Tax, Hyderabad-IV. The appellant, a special purpose vehicle formed pursuant to an MOU between the Andhra Pradesh Housing Board and IJM (India) Infrastructure Limited, developed a residential township comprising approximately 2,300 apartments. The appellant subcontracted the entire construction activity to its group company, M/s IJM (India) Infrastructure Limited, collected service tax from buyers under the category of Construction of Complex Service, availed CENVAT credit of service tax paid by subcontractors and other service providers, and discharged the balance service tax liability in cash.
A show cause notice alleged that since the appellant had subcontracted the entire construction activity, it was not itself providing any taxable service. It was therefore proposed that the service tax collected from buyers was required to be deposited in cash under Section 11D of the Central Excise Act, 1944, read with Section 83 and Section 73A of the Finance Act, 1994, and that CENVAT credit could not be utilized for this purpose. The notice also proposed recovery of Rs.17,85,000 towards service tax on technical services received from abroad during 2005-06 under the reverse charge mechanism. The adjudicating authority confirmed demands under Section 11D/Section 73A, interest, disallowed CENVAT credit, confirmed the import service tax demand, and imposed penalties under Sections 77(2) and 78.
