2026-VIL-1444-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Sale of Immovable Property - Liability on Advance Received for Sale of Plots – Service tax demand on amount returned to customers - Whether amount received as advance against sale of plots constitute sale of immovable property exempt from Service Tax under Section 65B(44)(a)(i) of Finance Act, 1994 – HELD - The appellant returned back amount regarding sale of flats due to non-viability of construction of residential towers. The said amount was not received in connection with rendering of any taxable service. Hence no Service Tax is payable on the amount returned back to customers - Even otherwise the amount was received as advance against sale of plots for villas. As amounts have been received in connection with sale of immovable property, the said amount is not liable to Service Tax as per Section 65B(44)(a)(i) of Finance Act, 1994 - Service Tax is not payable on amount received in connection with sale of plots. Demand confirmed in impugned order on this amount is set aside - Service Tax - Construction of Residential Complex Service - Liability Where Service Tax Already Paid Before Show Cause Notice – Whether Service Tax can be demanded again when it has been already paid before issuance of Show Cause Notice – HELD - The Appellant paid Service Tax payable in respect of rendering of service namely Construction of Residential Complex Service before issuance of Show Cause Notice. Section 73 of Finance Act, 1994 provides that if Service Tax payable has been paid along with interest before issuance of Show Cause Notice, then there is no need to issue Notice to demand Service Tax. As Appellant has already paid Service Tax payable in this case along with interest, no demand should be made. The principle that once Service Tax is paid before issuance of Show Cause Notice with all applicable interest, no demand can be subsequently made, is settled law – No additional Service Tax demand can be made as full Service Tax has been paid before issuance of Show Cause Notice. The demand confirmed in impugned order on this amount is not sustainable - Penalty cannot be imposed where underlying demand itself is not valid or where no taxability exists. The case relates to bonafide legal interpretation and there was no intent to evade tax or commission of fraud or suppression of facts on part of Appellant – The penalty imposed in impugned order is set aside and the appeal is allowed
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