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2019 (3) TMI 668 - AT - Service TaxWorks Contract Services - construction of Residential Complex Services (RCS) - reverse charge mechanism - levy of service tax - Held that - The issue in dispute is squarely covered by the decision of the Hon ble Apex Court in M/s.Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT for the period upto 01.06.2007, where it was held that Works contract were not chargeable to service tax prior to 1.6.2007 - demand for the period set aside. Period after 01.06.2007 - Held that - The Chennai Bench of the CESTAT in the case of M/s.Real Value Promoters Pvt. Ltd. & Ors. Vs Commissioner of G.S.T & Central Excise, Chennai & Ors. 2018 (9) TMI 1149 - CESTAT CHENNAI has held that even after 01.06.2007, service tax liability for composite contracts can only be demanded under Works Contract Service and not under CICS etc. - the impugned order demanding the amount of tax liability under CICS for a composite contract will not survive and will require to be set aside. Appeal allowed - decided in favor of appellant.
Issues involved:
1. Whether the appellant's construction activities fall under the category of Residential Complex Services (RCS) for service tax liability. 2. Whether a composite contract involving provision of service and transfer of property in goods can be covered under CICS and RCS. 3. The applicability of case laws in determining service tax liability for composite contracts. Analysis: 1. The appellant, registered for Works Contract Services (WCS) and Renting of Immovable Property Services (RIPS), was alleged by the department to be engaged in construction of Residential Complex Services (RCS) without proper registration. A show cause notice was issued proposing a service tax demand of ?13,85,987/- with interest and penalties. The adjudicating authority confirmed the demand and imposed penalties under the Finance Act, 1994. The appellant appealed against this order. 2. During the hearing, the appellant's advocate cited the Supreme Court's decision in the case of CCE & Cus., Kerala Vs L&T Ltd. and a recent decision by the tribunal, highlighting that a composite contract involving service provision and goods transfer can be covered under CICS and RCS. The advocate argued that the issue was settled by these precedents. 3. After hearing both parties and examining the records, the tribunal found merit in the appellant's argument. It noted that the issue was indeed settled by the case laws cited, particularly referring to the Supreme Court's decision for the period up to 01.06.2007. The tribunal further referenced a Chennai Bench decision for the period after 01.06.2007, which clarified that service tax liability for composite contracts should be demanded under Works Contract Service and not under CICS. Consequently, the tribunal set aside the impugned order demanding tax liability under CICS for a composite contract. 4. The tribunal allowed the appeal, providing consequential benefits as per the law. The operative part of the order was pronounced in court, granting relief to the appellant based on the interpretation of relevant case laws and legal provisions. This detailed analysis of the judgment covers the issues involved, the arguments presented, and the tribunal's decision based on legal precedents and interpretations of the law.
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