2023 (3) TMI 537 - AT - Service Tax

Levy of Service Tax - various projects executed by the appellant under Construction of Residential Complex Service - Section 73(1) read with Section 73(2) of the Finance Act 1994 - period from September 2007 to November 2009 - HELD THAT - The issue involved is no more res integra as the same stands settled by the decision of the Hon ble Apex Court in the case of Commissioner of C.Ex. Cus. Kerala v. M/s. Larsen Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT which has been followed by the Chennai Bench of the CESTAT 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 For activities of construction of new building or civil structure or new residential complex etc. involving indivisible composite contract such services will require to be exigible to service tax liabilities under Works Contract Service as defined under section 65(105)(zzzza) ibid. In view of the above ruling of the Chennai Bench of the CESTAT covers the period post 01.06.2007 also and hence the ratio laid down therein applies to the case on hand. Therefore the submissions of the Learned Advocate for the appellant that the issue is settled in favour of the appellant is accepted. Appeal allowed.

Summary

Issues:
- Appeal against Order-in-Original demanding Service Tax under Section 73(1) read with Section 73(2) of the Finance Act, 1994 for the period from September 2007 to November 2009.

Analysis:
1. The appellant, engaged in providing Construction of Residential Complex Services, was involved in promoting land, constructing buildings, and selling residential properties under composite contracts. A Show Cause Notice was issued proposing Service Tax liability, which the appellant disputed in a detailed reply.

2. The Commissioner confirmed the demand in the impugned Order-in-Original, leading to the appeal. The main issue for consideration was whether the demand in the order was correct.

3. The appellant's counsel cited precedents, including a decision of the Hon'ble Apex Court and a ruling by the Chennai Bench of the CESTAT. The Chennai Bench's ruling clarified that services provided by the appellant prior to 1.6.2007 as composite works contracts could not be categorized under commercial or industrial construction services or construction of complex services. For the period after 1.6.2007, service tax liability would apply only if the activities were services simpliciter.

4. The Revenue's Additional Commissioner failed to distinguish the above rulings. The Tribunal found that the Chennai Bench's ruling applied even post 01.06.2007, and thus, the issue was settled in favor of the appellant.

5. Consequently, the Tribunal set aside the demand and the impugned order, allowing the appeal with any consequential benefits as per the law.