2018 (12) TMI 1735 - AT - Service Tax

Taxability - services rendered by the appellant in respect of construction of residential units - period October 2007 to February 2008 - HELD THAT - The appellants are builders of residential complexes and entered into/sale deeds/agreements for construction with the buyers - the demand in the case in hand is prior to 01.07.2010 and the services provided were for construction of residential complexes by the builder. The decision in the case of Kolla Developers Builders of this Bench 2018 (11) TMI 164 - CESTAT HYDERABAD is directly on the same issue where it was held that legal position is settled and the appellant was not required to pay service tax on the services allegedly rendered by them during the relevant period. Appeal allowed - decided in favor of appellant.

Summary

Issues: Taxability of services rendered in construction of residential units prior to 01.07.2010 under the category of 'Works Contract Service'.

Analysis:
The judgment pertains to two appeals challenging Order-in-Original No. 06/2011-Adjn. (Commr.) ST, dated 27.01.2011, and Order-in-Appeal No. 02/2011 (H-IV) ST, dated 31.01.2011. The issue in question revolves around the taxability of services provided by the appellant during the period from October 2007 to February 2008 concerning the construction of residential units. The appellant, represented by a Chartered Accountant, had paid service tax under the composition scheme, while the Revenue claimed additional service tax liability on the construction of residential units before 01.07.2010. The appellant argued that the services rendered should not be classified under 'Works Contract Service' and cited precedents to support their position.

The Tribunal considered the submissions from both sides and examined the records. It was noted that the appellants were builders of residential complexes and had engaged in agreements for construction with buyers. The demand in question pertained to services provided prior to 01.07.2010 for the construction of residential complexes. The Tribunal referred to a previous decision by the same Bench in the case of Kolla Developers & Builders, which had a similar issue, and ruled in favor of the appellant based on the precedent. The Tribunal concluded that the impugned orders were unsustainable and set them aside, thereby allowing the appeals.

In the operative part of the order pronounced in open court, it was stated that the impugned orders were set aside, and the appeals were allowed. The judgment provides a detailed analysis of the issue of taxability of services related to the construction of residential units before 01.07.2010 under the 'Works Contract Service' category, emphasizing the importance of legal precedents in reaching a decision.