2024 (1) TMI 138 - AT - Service Tax

Levy of Service Tax - Construction services - Commercial or Industrial Construction and Construction of residential complex - Suppression of facts or not - invocation of extended period of limitation - HELD THAT - There is no dispute that the appellant had provided the construction service in respect of construction of building belonging to Income Tax Department and Construction of staff quarters for Central Administrative Tribunal. Undisputedly, the buildings are government building and not commercial building, therefore, the service neither fall under Commercial or Industrial Construction Service nor under construction of residential complex. The appellant have provided the service in the capacity of sub- contractor. In catena of case laws, this Tribunal has taken a view that since the issue whether sub- contractor is liable to pay the service tax or otherwise was under litigation and it was finally decided by the larger bench in the case of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. 2019 (6) TMI 518 - CESTAT NEW DELHI-LB , in view of that larger bench judgment there cannot be any malafide intention or suppression of fact with intent to evade the service tax on the part of the appellant. Therefore, the demand is not sustainable on the ground of limitation also. The impugned order is set aside. Appeal is allowed.

Summary

Issues involved:
The issues involved in the judgment are the demand under construction service for the years 2009-2010 and 2010-2011, classification of the construction service as Commercial or Industrial, construction of government buildings, liability of sub-contractor for service tax, and the sustainability of the demand on the ground of limitation.

Classification of construction service:
The appellant argued that the construction of Income Tax building and Staff Quarters for Central Administrative Tribunal, being government buildings, does not fall under Commercial or Industrial Construction Service. The Tribunal agreed, stating that the service provided did not fall under the mentioned category. The judgments cited by the appellant supported their case, leading to the conclusion that the demand was not sustainable based on the nature of the construction service provided.

Liability of sub-contractor for service tax:
The appellant provided the service as a sub-contractor, and the Tribunal referred to previous case laws to determine the liability of sub-contractors for service tax. It was noted that the issue had been under litigation and was finally decided by a larger bench judgment. In light of this judgment, the Tribunal concluded that there was no malafide intention or suppression of fact by the appellant to evade service tax. Consequently, the demand was deemed unsustainable on the ground of limitation as well.

Decision:
After considering the submissions from both sides and examining the records, the Tribunal set aside the impugned order. The appeal was allowed, and the demand under construction service for the specified years was deemed unsustainable. The judgment was pronounced in open court on 02.01.2024.