2023 (6) TMI 246 - AT - Service Tax

Classification of services - construction of residential houses - to be classified as Construction of Complex Services or not - abatement under the Notification No. 1/2006-ST dated 01.03.2006 - extended period of limitation. HELD THAT - The Hon ble Apex court in the case of CCE vs. Larsen Toubro Limited 2015 (8) TMI 749 - SUPREME COURT has settled the issue relating to works contract service which includes supply of material and labour for consideration and the same is taxable only from 01.06.2007 - even for the period after 01.006.2007, various decisions of the Tribunal have consistently held that the composite contract or works contract service even after 01.06.2007 cannot be taxed under Construction of Complex Service under Section 65 (105) (zzh) read with Section 65 (30a) of the Finance Act, 1994. Similarly, in the case of Srishti Construction vs. Commissioner of Central Excise ST, Ludhiana 2017 (12) TMI 172 - CESTAT CHANDIGARH , the Division Bench of this Tribunal has also set-aside the demand of service tax under Works Contract Service and has also held that the extended period of limitation is not invokable and allowed the appeal of the appellant with consequential relief, if any, as per law. The impugned orders are set aside - appeal allowed.

Summary

Issues Involved:
The judgment involves three appeals directed against the impugned order passed by the Ld. Commissioner (Appeals) of Central Excise, Gurgaon, concerning the classification of services provided for the construction of residential houses and the demand confirmed.

Appeal No. ST/560/2011 (Period 16.06.2005 to 31.03.2007):
The appellant, a proprietorship concern engaged in construction of residential houses, received a sum including material and labor. The department alleged non-payment of service tax on construction services, issuing a show cause notice for a demand of Rs. 11,24,458. The appellant contended that the works contract service was not taxable before 01.06.2007 and should be classified as such. Citing judicial precedents, the appellant argued that composite contracts are classifiable as 'Works Contract Service'. The Tribunal found that works contract service, including supply of material and labor, was taxable only from 01.06.2007. Relying on previous decisions, the Tribunal set aside the impugned orders and allowed the appeals.

Appeal No. ST/798/2011 (Period 16.06.2005 to 31.03.2008):
The appellant's case was similar to the first appeal, with a demand of Rs. 39,43,514. The issues and arguments presented were identical to the first appeal, leading to the same conclusion by the Tribunal to set aside the impugned orders and allow the appeals.

Appeal No. ST/1743/2011 (Period 16.06.2005 to 19.10.2007):
This appeal also involved the construction of residential houses and a demand of Rs. 6,56,523. The appellant's contentions and legal arguments mirrored those in the previous appeals. Following the same reasoning and legal precedents, the Tribunal set aside the impugned orders and allowed the appeals with consequential relief, if any, as per law.

This judgment clarifies the classification of construction services under the 'Works Contract Service' category and the tax liability for composite contracts involving material and labor. The Tribunal relied on legal precedents and statutory provisions to determine the correct tax treatment for the services provided.