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2018 (12) TMI 951 - AT - Service TaxConstruction services - sub-contract - Construction of Residential Complex Service - demand of tax with interest and penalties - Held that - The issue decided in the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI , where it was held that The services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service. For the period after 1.6.2007, service tax liability under category of commercial or industrial construction service‟ under Section 65(105)(zzzh) ibid, Construction of Complex Service‟ under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services‟ simpliciter. The impugned demands made in all these appeals for composite contracts under construction of residential complex instead of works contract cannot sustain - appeal allowed - decided in favor of appellant.
Issues:
Classification of construction activity under "Construction of Residential Complex Service" for the period April 2006 to March 2008. Demand of service tax on construction activity undertaken on a sub-contract basis for L&T during the period April 2008 to September 2008. Demand of service tax liability for construction activity on a sub-contract basis for L&T during the period October 2008 to March 2009. Issue 1: Classification of construction activity under "Construction of Residential Complex Service" for the period April 2006 to March 2008. The appellant undertook construction activity for an apartment complex during the mentioned period. The adjudicating authority demanded service tax along with penalties, which was upheld by the Commissioner (Appeals). The appellant argued that the service liability should fall under "Works Contracts Service" based on relevant case laws. The Tribunal agreed with the appellant, citing the case laws of Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. The Tribunal held that service tax liability for composite contracts should be under "Works Contract Service" and not under "Construction of Residential Complex Service." Consequently, the impugned demand was set aside, and the appeal was allowed. Issue 2: Demand of service tax on construction activity undertaken on a sub-contract basis for L&T during the period April 2008 to September 2008. The appellants carried out construction activity on a sub-contract basis for L&T, leading to a proposed demand of service tax with interest and penalties. The original authority confirmed the demand, which was upheld by the Commissioner (Appeals). The appellant argued that the service tax liability should be under "Works Contracts Service" based on relevant case laws. The Tribunal agreed with the appellant's argument, applying the principles established in the Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. cases. Consequently, the impugned demand for service tax under "Construction of Residential Complex Service" was set aside, and the appeal was allowed. Issue 3: Demand of service tax liability for construction activity on a sub-contract basis for L&T during the period October 2008 to March 2009. The appellants were engaged in construction activity on a sub-contract basis for L&T, resulting in a proposed demand of service tax liability with interest and penalties. The original authority confirmed the demand, which was upheld by the Commissioner (Appeals). The appellant contended that the service tax liability should be under "Works Contracts Service" based on relevant case laws. The Tribunal concurred with the appellant's argument, applying the precedents set in the Larsen & Toubro Ltd. and Real Value Promoters Pvt. Ltd. cases. Consequently, the impugned demand for service tax under "Construction of Residential Complex Service" was set aside, and the appeal was allowed. This judgment addresses the classification of construction activities for service tax purposes under "Construction of Residential Complex Service" for different periods. The Tribunal ruled in favor of the appellants in all three appeals, setting aside the demands for service tax liability under the said category and allowing the appeals based on the application of the principles established in relevant case laws.
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