Case Law Details
M/s Friends Land Developers Vs Commissioner of Central Excise & Service Tax (CESTAT Allahabad)
As per the facts on record, the appellant is engaged in providing “Construction of Residential Complex Services” and was duly discharging Service Tax on the same. However while discharging their Service Tax liability, they were not including the amount charged from their customers in respect of parking space.
2. Revenue entertained a view that the consideration for the parking space is an integral part of the residential complex constructed by the appellant and the value of the same has to be included in the value of the services. Accordingly, proceedings were initiated against them by way of issuance of a show cause notice dated 24/07/20 14, raising demand of duty for the period June, 2010 to June, 2012. The notice stands culminated into impugned order passed by the Lower Authorities confirming demand to the extent of Rs.7,86,972/-(Seven lakhs Eighty Six Thousands Nine Hundred Seventy Two), along with confirmation of interest and imposition of penalty of identical amount.
3. Hence the present appeal.
4. Learned advocate Shri Rajesh Chhibber appearing for the appellant submits that the parking charges are not a part of the construction activities and as such confirmation of demand in respect of the same under the category of construction of “Residential Complex Service“was not justified. He submits that subsequently in 2010 a new category “Preferential Location or External or Internal Development of Complex” was inserted to tax the amount received by the builder on account of other allied services. As per the definition of the said services, the parking place was excluded. It shows that parking place was a part of the taxable service under newly introduced category and as per the settled law the same cannot be held to be a part of the earlier category of service falling under “Residential Complex Service“. As such, he submits that demand of duty in respect of parking space is not justified.
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Tax is paid on Super built up area in residential flats also parking areas will be usually covered in the flat cost of super built up area and service tax or GST is paid accordingly and though builder again sells parking at separate rate and now again paying tax on parking area isn’t it a double taxation.