2019 (3) TMI 1505 - AT - Service Tax

Commercial or Industrial Construction Services - Residential Complex Services - demand of service tax - Held that - The works undertaken are of composite nature involving both service element and supply of goods. The demand prior to 01.06.2007 for such composite indivisible contracts cannot sustain as per the decision of the Hon ble Apex Court in M/s. Larsen & Touboro Ltd., 2015 (8) TMI 749 - SUPREME COURT - The demand after 01.06.2007 is also not sustainable under the category of Commercial or Industrial Construction Services or Construction of Residential Complex Services as per the decision laid down by the Tribunal in the case of M/s. Real Value Promoters 2018 (9) TMI 1149 - CESTAT CHENNAI - The demand under Construction of Residential Complex Services and Commercial or Industrial Construction Services cannot sustain and requires to be set aside. Management, Maintenance or Repair Services - toll plaza - demand of service tax - Held that - Undisputedly, Toll shed / Plaza is constructed on the side of road which is national highway. The activities of constructions and repair and maintenance of roads are exempted from levy of service tax - The decision in the case of M/s. Phoenix Engineering 2015 (12) TMI 749 - CESTAT MUMBAI has discussed the issue and held that Repair and Maintenance of Roads and Toll Plaza are not subject to levy of service tax - the demand under Management, Maintenance or Repair Service is not sustainable and requires to be set aside. Consulting Engineering Services - demand of service tax - Held that - The appellants are engaged in construction activities. The definition of Consulting Engineering Services show that a professional engaged in giving advices of consultancy would alone fall under this category. The department has not produced any evidence to show that the appellants have rendered any advice of this nature - the demand under Consulting Engineering Services is incorrect and requires to be set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand raised under Commercial or Industrial Construction Services, Residential Complex Services, Maintenance or Repair Services, and Consulting Engineering Services.

Commercial or Industrial Construction Services and Residential Complex Services:
The appellants, engaged in construction activities, were investigated for evading service tax. The demand was raised under various categories, including Commercial or Industrial Construction Services and Construction of Residential Complex Services. The appellants argued that the demand for service tax on composite contracts could not be sustained under these categories, citing relevant legal precedents. The Tribunal agreed, citing decisions by the Apex Court and the Tribunal, and set aside the demand under these categories.

Maintenance or Repair Services:
The department had confirmed a demand under Maintenance or Repair Services for the Toll Plaza constructed on a national highway. The appellants argued that these activities were exempt from service tax based on the nature of the construction and repair work. Citing a Tribunal decision, the Tribunal agreed that Repair and Maintenance of Roads and Toll Plaza were not subject to service tax. Therefore, the demand under Maintenance or Repair Services was set aside.

Consulting Engineering Services:
The appellants were also facing a demand under Consulting Engineering Services. The appellants contended that they were not providing consultancy services but were engaged in construction activities. The Tribunal noted that Consulting Engineering Services involve providing professional advice, which the department failed to prove the appellants were engaged in. Consequently, the demand under Consulting Engineering Services was deemed incorrect and set aside.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal with consequential reliefs, if any.