2018 (4) TMI 965 - AT - Service Tax

Construction of Complex Service - construction of residential houses for Rajasthan Housing Board, Jodhpur - extended period of limitation - Held that - There were divergent views with regard to tax ability of works contract service and matter was finally resolved by the judgment of Hon ble Supreme Court in the case of Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT . The period of dispute is from 2006-07 to 2009 -10 and the SCN was issued on 20.10.2011 - The allegation cannot be leveled against the appellant that it had indulged into the activities of fraud, collusion, willful, mis - statement etc., with intent to evade payment of Service Tax. Since, the said ingredients mentioned in proviso to Section 73 (1) of the Finance Act, 1994 are absent, the adjudged demand should only be confined to normal period only and the extended period of limitation cannot be invoked for confirmation of the said adjudged demand. Demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Classification of services provided by the appellant under Construction of Complex Service or Works Contract Service.
2. Barred by limitation - Time period for issuance of show cause notice.

Classification of services:
The appeal was against the order passed by the Commissioner of Central Excise (Appeals) regarding the classification of services provided by the appellant. The Service Tax Department contended that the services fell under the taxable entry of Construction of Complex Service. However, the adjudicating authority dropped the proposals against the appellant, stating that the construction of individual residential houses for the Housing Board was not taxable under the category of "Construction of Complex" service. The Commissioner (Appeals) allowed the Revenue's appeal, holding the appellant liable to pay Service Tax under Residential Complex Service. The appellant argued that the services should be classified under Works Contract Service, relying on the nature of the contract and a judgment of the Hon'ble Supreme Court. The Tribunal found that the services provided by the appellant were composite in nature and fell under works contract service, leviable to Service Tax from 01.06.2007. The Tribunal concluded that the appellant did not engage in activities to evade payment of Service Tax and held that the demand was confined to the normal period only, as the extended period of limitation could not be invoked.

Barred by limitation - Time period for issuance of show cause notice:
The Tribunal examined the issue of limitation regarding the show cause notice issued beyond the normal period. Citing previous decisions, the Tribunal held that the extended period for alleging fraud, collusion, or willful misstatement was not legally sustainable in complex matters prone to different interpretations. Referring to a specific case, the Tribunal emphasized that the service tax liability under works contract service should be restricted to the normal period as applicable under the Finance Act, 1994. Consequently, the Tribunal found no merits in the impugned order on the ground of limitation and allowed the appeal in favor of the appellant.

This judgment addressed the classification of services provided by the appellant and the issue of limitation concerning the time period for the issuance of the show cause notice. The Tribunal ruled in favor of the appellant, deciding that the services fell under works contract service and that the show cause notice was barred by limitation.