Date of order: 31 October 2022

Fact:

• The Appellant, M/s. S. Kumar Builders, is a provider of service under the head “Works Contract Service” and is registered with the Department.
• Pursuant to the show cause notice dated 6.11.2019, service tax has been demanded as short paid/not paid, based on the Income Tax records like Form 26 AS, Income Tax Return, Profit & Loss Account, etc. for the financial year 2014-2015.
• The appellant proposed demand of Rs.11,67,226/- was confirmed with equal amount of penalty under Section 78. Further, a late fee of Rs.21,000/- has been imposed under Rule 7C read with Section 70. Further, the penalty of Rs.10,000/- has been imposed under Section 77(2) for not showing correct gross receipt of services in ST-3 Returns.

Issue:

• Whether the service tax has been rightly demanded as short paid or not paid ?

Order:

• The authorities hold that the appellant is entitled to exemption with respect to the aforementioned works contract service provided to the Trusts registered under Section 12A/12AA of the Income Tax Act, thus, the demand of Rs. 4,28,424/- is set aside.
• In respect to the second issue, the authorities found that no service tax is payable on the 
• sale-purchase of property. In the facts of the present case, there is no contract for construction of a house property along with material. Rather, admittedly, appellant have sold fully constructed and furnished house property. Hence, no service tax is payable on the same and the demand of Rs. 55,620/- is set aside.
• With respect to issue of various civil constructions/maintenance works done, it was held that the appellant have rightly claimed abatement, accordingly they have paid their service tax liability being 50% of the tax payable.
• The appellant is entitled to consequential relief, the appeal is allowed.