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2023 (10) TMI 680 - AT - Service TaxExtended period of limitation - demand under construction of residential complex service for the period from 01.02.2007 to 31.01.2012 - requirement of payment of Service Tax by the principal contractor on behalf of the appellant or not - N/N. 01/2006-S.T. dated 01.03.2006 - HELD THAT - The appellant had undoubtedly carried out construction activity, by virtue of indivisible works contract involving supply of goods and construction activity. Hence, the Revenue has proceeded on a wrong premise to confirm the impugned demand. Moreover, it is also clear, by virtue of there being no rebuttal by the Revenue, that the main contractor namely, M/s. Southern Properties and Promoters, had remitted Service Tax on the project, for which the appellant was only a sub-contractor. No doubt, the sub-contractor cannot claim immunity from Service Tax just because the liability was on the main contractor, but once we agree that what was involved was indivisible works contract which was not at all amenable to Service Tax in the hands of a builder, at least up to the date of insertion of Explanation i.e., 1.07.2010, there cannot be any liability in the hands of the appellant up to 01.07.2010 under construction of complex service - For the subsequent period, however, even though the work was carried out by virtue of indivisible works contract, the authority below has chosen to confirm the demand only under construction of residential complex service, which is not in accordance with law since, apparently, the tax is demanded under a wrong classification which is not permissible in view of the decision of the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT . The demand in the impugned order cannot sustain, for which reason the same is set aside - Appeal allowed/
Issues involved:
The issue involves the demand for Service Tax under the construction of residential complex service for the period from 01.02.2007 to 31.01.2012. Summary of Judgment: Issue 1: Liability of Service Tax on the appellant as a sub-contractor The Commissioner confirmed the demand for Service Tax on the appellant, who undertook construction work as a sub-contractor for a residential complex project. The appellant's contention of the principal contractor discharging the tax liability was rejected, citing the liability on the service provider. The demand was confirmed based on Notification No. 01/2006-S.T. dated 01.03.2006. Issue 2: Appeal against the demand and Order-in-Original The appellant, a partner in a partnership firm involved in the construction, challenged the demand, arguing that the partnership firm had already paid the Service Tax. The appellant contended that the service provided was indivisible works contract service, citing relevant legal precedents. The appellant also disputed the denial of abatement under the Notification, asserting that the demand was not in accordance with the law. Issue 3: Sustainability of the demand under construction of residential complex service The Tribunal observed that the demand for the period from 01.02.2007 to 31.01.2012 was not sustainable. It noted that the appellant's construction activity, classified as an indivisible works contract, did not warrant Service Tax liability. The Tribunal emphasized that the demand under the construction of residential complex service was incorrect, citing legal precedents. Key Points: - The demand for Service Tax on the appellant as a sub-contractor was confirmed based on the liability of the service provider. - The appellant challenged the demand, arguing that the partnership firm had already paid the tax and that the service provided was an indivisible works contract. - The Tribunal found the demand unsustainable, stating that the construction activity did not attract Service Tax liability, especially for the period up to 01.07.2010. - The demand under the construction of residential complex service was deemed incorrect, and the Tribunal set aside the demand in the impugned order. This summary encapsulates the key issues and the Tribunal's decision on the sustainability of the Service Tax demand under the construction of residential complex service for the specified period.
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