Law: Sales Tax Act, 1990

Section: 2(30)

Law: Federal Excise Rules, 2005

Section: 3,3(5)(c),2(9),2(19a),2(23),2(23)(a)

[Sales Tax Act, 1990, Sections 2(30)],,..Federal Excise Act, 2005, Sections 3, 3(5)(c), 2(9), 2(19a), 2(23), 2(23)(a),,. Finance Act, 2005, Entry No. 12 in the table II of the First Schedule,,. C.B.R. Letter No. 1(59) STP-94, dated 14.11.21994,.. Appeal,Audit,, Show-cause Notice,.. It was observed during audit of the appellant that they had not paid FED of Rs. 224,350,000/- on account of developed land for residential and commercial units. Accordingly they were issued a Show-cause Notice, reply of the appellant was not accepted and an order was passed for the recovery of amount along with default surcharge and penalty, hence this appeal,,. AR of the appellant stated that Federal Excise Duty under section 3 of the Federal Excise Act, 2005 is levied on services rendered even if paid in cash or though deferred payments but not on advances received from members/customers for rendering of such services. He further stated that the services rendered cannot be ascertained in case of land development till the time of completion of 100% development work and handing over of physical possession of the developed plot to the member, when the services are finally considered to be rendered to the owner of plot. He further argued that the appellant is not directly engaged in the development of land. The fact, the contractor/developer actually provides services of development of land into housing plots or commercial plots for members. The appellant acts in fiduciary relationship to their members and is engaged in managing the development work on behalf of their members. The question involve I the case is whether FED is applicable when booking was made or when handed over the customers and secondly who is responsible to pay FED whether the appellant or the contractor/developer.,.. DR argued that the issue involved in the instant appeal is non payment of FED on development of land into residential and commercial units. The Federal Government had levied Federal Excise Duty vide Finance Act, 2008 @ Rs.100/- per sq yard of land developed into residential and commercial plots. The appellant provided details of developed land during the period 01.07.2008 to 31.03.2011 and claimed that…

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