2018 (11) TMI 35 - AT - Service Tax

Constructions of Residential Complex Service - Composite service involving sale of goods alongwith providing of services - Works Contract Service or not? - Held that - The preliminary issue of service being provided under Work Contract Service‟ is required to be adjudicated in the light of law laid down by the Hon‟ble Supreme Court in the case of Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT - the matter should be remanded to Commissioner for fresh decision - Appeal allowed by way of remand.

Summary

Issues:
Demand of service tax under "Constructions of Residential Complex Service" for the period 16/06/2005 to 31/03/2008
Classification of services as "Work Contract Service"
Exemption of services related to roads from taxable services
Exemption of single storey houses from "Residential Complex Service"
Demand confirmation under wrong category for the period after 01/06/2007
Time bar for the demand calculation based on balance sheet figures

Analysis:
The judgment addresses the demand of service tax amounting to ?86,22,724 against the appellant for providing services categorized as "Constructions of Residential Complex Service" to M/s Greater Noida Industrial Development Authority. The demand was confirmed through a show cause notice issued on 07/06/2010 for the period from 16/06/2005 to 31/03/2008, invoking the extended period of limitation.

The appellant argued that their services were composite in nature, involving the sale of goods and services, thus falling under "Work Contract Service." They cited the Supreme Court's decision in CCE, Kerala vs. Larsen & Toubro Ltd. to support their classification. The appellant contended that services related to roads are exempt from taxable services, and construction of roads should be classified as "Commercial or Industrial Construction Services," which are non-taxable. Additionally, they claimed that the single-storey houses they constructed did not fall under the definition of "Residential Complex Service," citing relevant tribunal and apex court decisions.

Regarding the demand for the period after 01/06/2007, the appellant argued that the services provided should be classified as "Works Contract Services" rather than "Construction Services." They asserted that the demand was confirmed under the wrong category and should be set aside based on various legal precedents.

The appellant also challenged the demand on the grounds of the time bar, contending that the calculation was based on figures from the balance sheet, indicating no mala fide intentions on their part. The Tribunal noted that the issue of service classification under "Work Contract Service" needed further examination in light of the Supreme Court's ruling in Larsen & Toubro Ltd.

Consequently, the Tribunal decided to remand the matter to the Commissioner for a fresh decision, leaving all other issues open for re-decision by the Original Adjudicating Authority. The Tribunal clarified that they had not expressed any opinion on the raised issues, allowing the appellant to contest them before the Original Adjudicating Authority with a reasonable opportunity. The appeal was allowed by way of remand, with the pronouncement made in court on 31/10/2018.