2023 (4) TMI 350 - AT - Service Tax

Denial of Service tax Liability - construction of residential property - denial on the ground that what they undertook was in the nature of works contract service; but however, in the adjudication, the Commissioner vide impugned Order-in-Original, has confirmed the proposals made in the Show Cause Notice and it is against this order that the present appeal has been filed before this forum - whether the authority below is justified in demanding Service Tax from the appellant under construction of complex service for the period from 16.06.2005 to March 2010? - HELD THAT - Through the orders of the various CESTAT Benches which have been considered by the Hyderabad Bench of the CESTAT in M/S PRAGATI EDIFICE PVT LTD (VICE-VERSA) 2019 (9) TMI 792 - CESTAT HYDERABAD , where it has been categorically held that no Service Tax could be levied on construction of residential complexes prior to 01.07.2010 even when the service is rendered either as service simpliciter or as a works contract. Admittedly, the period of dispute, in the first paragraph, is from 16.06.2005 to March 2010 and hence, the above ruling is squarely applicable to the present case. The demand raised in the impugned order cannot sustain, for which reason the impugned order is set aside - appeal allowed.

Summary

Issues:
The issue involved is whether the authority was justified in demanding Service Tax from the appellant under construction of complex service for the period from 16.06.2005 to March 2010.

The appellant, a builder, undertook construction of various residential projects and was alleged to have rendered construction of complex services, leading to a demand for Service Tax. The Commissioner confirmed the demand in the Order-in-Original, prompting the appellant to appeal.

The appellant contended that the taxability under construction of complex services (CCS) or works contract service (WCS) had been settled by previous CESTAT decisions following the Supreme Court's ruling in a specific case. Reference was made to a Hyderabad Bench decision outlining the taxability of construction of residential complexes before and after specific dates.

After considering various CESTAT decisions, including the Hyderabad Bench ruling, it was held that no Service Tax could be levied on construction of residential complexes before 01.07.2010, regardless of whether the service was rendered as service simpliciter or as a works contract. As the period in question fell before this date, the demand for Service Tax was deemed unsustainable, and the impugned order was set aside.

The appeal was allowed with consequential benefits, if any, as per law.

(Order pronounced in the open court on 06.04.2023)