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2023 (11) TMI 722 - AT - Service TaxFailure to discharge service tax liability - construction of complex service - works contract service or not - composite contract - recovery of service tax with interest and penalty - period January, 2006 to September, 2010 - HELD THAT - The facts not in dispute are that the appellant being a developer, under an agreement with M/s Amco Batteries Ltd, the land owner, constructed seven residential blocks itself and by engaging subcontractors. The flats/apartments in the said residential blocks were sold to customers by entering into individual agreements with flat owners/buyers. Also, it is not in dispute that the appellant has rendered the services which are composite in nature i.e. comprises of both materials and services and paid state VAT in rendering works contract service. It is appellant s contention that for the period prior to 01.06.2007, the issue of levy of service tax on works contract service is covered by the judgement of Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT . For the period from 01.06.2007 to September, 2010, the appellant has discharged service tax under the category of works contract service . The service tax is not leviable on construction of complex service prior to 01.06.2007, being a composite contract in the nature of works contract service and for the period from 01.06.2007 to September, 2010, the appellant had discharged service tax under the works contract service . The impugned order is set aside - Appeal allowed.
Issues involved: Determination of liability to discharge service tax under the category of 'construction of complex service' for the period January 2006 to September 2010.
Facts and Arguments by Appellant: The appellant engaged in providing taxable services as an 'Advertising Agency' and 'Works Contract Services'. The appellant, as a developer, entered into a Development Agreement with a landowner to construct residential blocks. Various contractors rendered construction services, and service tax was paid under the 'works contract service' category from June 2007 to September 2010. The appellant contended that prior to June 2007, service tax on works contract service was not leviable as per relevant judgments and circulars. The appellant maintained that all facts were communicated to the department, and there was no suppression of facts. Revenue's Position: The Revenue reiterated the findings of the Commissioner regarding the liability of the appellant. Judgment: The Tribunal analyzed the facts and legal provisions. It was established that prior to June 2007, service tax on 'construction of complex service' was not leviable for composite contracts resembling 'works contract service'. From June 2007 to September 2010, the appellant discharged service tax under 'works contract service'. Referring to relevant judgments and circulars, the Tribunal concluded that service tax was not applicable on 'construction of complex service' before June 2007 and that the appellant had appropriately paid under 'works contract service' for the subsequent period. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief as per law. Separate Judgment: No separate judgment was delivered by the judges in this case.
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