CESTAT Upholds Service Tax Demand Imposed under Category of ‘Construction of Complex’ Services on Ground of Absence of Conclusive Evidence [Read Order]

The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the service tax demand imposed under the category of Construction of complex services on the ground of the absence of conclusive evidence. 

Manan Infra Development Pvt Ltd, the appellant assessee was engaged in providing ‘Construction of Residential Complex Services’ and was registered under Section 69 of the Finance Act, 1994 for discharging their service tax liability under the category of ‘Construction of Complex’ services. 

The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand of Service tax to Rs.10,68,657/- along with a penalty of 50% of the tax under section 78 of the Finance Act. 

Vishwa Jeet Saharan, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the Commissioner (Appeals) reduced the service tax demand along with the penalty and interest to the assessee and thus the decision was liable to be sustained. 

During the hearing of the appeal, none appeared on behalf of the assessee. The assessee further submitted that the amount received against booking was legally not sustainable, as the allottees had stopped the payment and requested for cancellation of bookings and return of advance and the tax paid was refundable, which rendered the entire exercise revenue neutral. 

Also submitted that the demand confirmed for the extended period was hit by limitation as the transactions were duly recorded in books of accounts/ balance sheet and the audit has pointed out based on records maintained by the assessee. 

The Bench observed that the assessor had made no effort to provide any documents to evidence the return of the advance amount and they had not suppressed any fact, the Commissioner (Appeals) had noted that they had not filed any Service tax returns and had suppressed the taxable value from the department. 

A single-member bench comprising Hemambika Priya (Technical) upheld the decision made by the Commissioner (Appeals) while dismissing the appeal filed by the assessee. 

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