2025-VIL-720-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Construction of Residential Complex, Works Contract Service, Renting of Immovable Property, Mutual Fund Agent, Legal Expenses – Demand of service tax on the grounds of short payment of tax on booking of flats, non-payment of tax on booking of commercial property, non-payment of service tax on job receipts, short payment of service tax on rent received, non-payment of service tax on forfeiture of guest house booking amount, non-payment of service tax on commission received, and short payment of service tax under reverse charge mechanism on legal expenses - Whether the demand of service tax under the head 'Construction of Residential Complex' on the amount of advances received from prospective buyers is sustainable - HELD - For the activity of 'Construction of Residential Complex' to be taxable under service tax, there must be an ongoing construction even after 01.07.2010, when the service was introduced. For projects completed or substantially completed before 01.07.2010, the portion of construction completed before that date would not be taxable. The appellant's reconciliation statement provided in this regard to be satisfactory and the demand is set aside on this ground – The demands confirmed in impugned Order is erroneous and set aside – The appeal is allowed - Whether the demand on construction services provided by the Appellant to M/s Jaypee Cooperative Group Housing Society Ltd. is sustainable – HELD - the Appellant had provided evidence in the form of agreement, WCT deduction certificates, and correspondence to demonstrate that the services provided to M/s Jaypee were in the nature of Works Contract Service, which was not taxable in the earlier period when the work was completed. The Tribunal also noted that the Appellant had deposited the requisite service tax on the amount received in FY 2013-14, and the demand was accordingly set aside - Whether the demand under the head 'Renting of Immovable Property' service is sustainable – HELD – The demand is upheld as the Appellant did not make any submissions or provide any reasoning to dispute this demand - Whether the demand under the head 'Business Auxiliary Service' on the amount received as forfeited guest house booking amount is sustainable – HELD - The Adjudicating Authority had classified the demand under a different category (Mandap keeper service) than the one proposed in the Show Cause Notice (Business Auxiliary Service), which is not permissible under law – Demand is set aside - Whether the demand received by the Appellant as commission from Mutual Fund transactions is exempt under Notification No.25/2012 – HELD - The Exemption Notification does not require the Appellant to have an AMFI/ARN number to be considered a mutual fund agent and avail the exemption. Since the Appellant had received the commission from an asset management company, it was entitled to the benefit of the exemption under Clause 29(c) of the Notification - Whether the demand on alleged short payment of tax on 'legal expenses' under Reverse Charge Mechanism is sustainable – HELD - The Appellant had provided documentary evidence to show that the 'legal expenses' pertained to payments made to entities other than advocates/advocate firms, and hence, would not be taxable under Reverse Charge Mechanism.
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