2018 (9) TMI 33 - AT - Service Tax

Works Contract Service - Construction of Residential Complex Service - appellant contended that w.e.f. 01.06.2007, they registered themselves under Works Contract Service and paid service tax on the said service under works contract service - Held that - The issue is covered by the decision in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT , where it was held that such activities were covered w.e.f. 01.06.2007 under works contract service and for the earlier period the same activities which were covered by works contract service did not attract any service tax - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Classification of services under "Construction of Residential Complex Service" and "Works Contract Service" for the period from 16.06.2005 to 31.03.2008.
2. Applicability of service tax on construction activities prior to 01.06.2007.
3. Interpretation of the ruling by the Hon'ble Supreme Court in the case of Commissioner of Customs and Central Excise, Kerala vs. Larsen & Toubro Ltd.

Issue 1: Classification of services under "Construction of Residential Complex Service" and "Works Contract Service" for the period from 16.06.2005 to 31.03.2008:
The case involved a dispute where the appellant was issued a show cause notice for demanding Service Tax on construction of residential complexes for U.P. Rajkiya Nirman Nigam Ltd. The appellant argued that from 01.06.2007, they registered under "Works Contract Service" and paid service tax accordingly. The Original Authority and learned Commissioner (Appeals) confirmed the demand under "Construction of Residential Complex Service." The appellant contended that post the ruling by the Hon'ble Supreme Court in the case of Larsen & Toubro Ltd., activities under works contract service were not taxable before 01.06.2007. The Tribunal held that the issue was covered by the Supreme Court ruling, and therefore, set aside the impugned order and allowed the appeal.

Issue 2: Applicability of service tax on construction activities prior to 01.06.2007:
The appellant's argument centered on the classification of services and the payment of service tax under works contract service from 01.06.2007 onwards. The Tribunal noted the appellant's plea that activities under works contract service were not taxable before 01.06.2007, as per the Supreme Court ruling. The Revenue agreed that the issue was indeed covered by the Supreme Court's decision. Consequently, the Tribunal found the appellant's submissions sustainable, leading to the setting aside of the demand for the period in question and allowing the appeal.

Issue 3: Interpretation of the ruling by the Hon'ble Supreme Court in the case of Commissioner of Customs and Central Excise, Kerala vs. Larsen & Toubro Ltd.:
The Tribunal extensively discussed the relevance of the Supreme Court's ruling in the case of Larsen & Toubro Ltd., emphasizing that the said ruling dictated the taxability of activities under works contract service before 01.06.2007. Both the appellant and the Revenue acknowledged the applicability of this ruling to the present case. The Tribunal, after considering the submissions from both sides, concluded that the issue at hand was indeed covered by the Supreme Court's decision, leading to the setting aside of the impugned order and allowing the appeal.

This detailed analysis of the judgment highlights the classification of services, the impact of the Supreme Court ruling, and the ultimate decision by the Tribunal in favor of the appellant based on the interpretation of relevant legal provisions and precedents.