2019 (9) TMI 1732 - AT - Service Tax

Reversal of proportionate credit of the service tax utilised in the construction of flats - it is case of Revenue that the said sale and purchase of flats after the completion certificate do not attract any service tax liability - HELD THAT - The issue is no more res integra and stands settled by the Tribunal in the decision of M/S ALEMBIC LTD. AND SHRENO LTD. VERSUS C.C.E. S.T. VADODARA-I 2018 (10) TMI 1557 - CESTAT AHMEDABAD . The said decision of the Tribunal stands upheld by the Gujarat High Court when the appeal filed by the Revenue was rejected reported as THE PRINCIPAL COMMISSIONER VERSUS M/S ALEMBIC LTD. 2019 (7) TMI 908 - GUJARAT HIGH COURT . It stands held in the said decision that as the credit availed initially was in accordance with law and there being no provision in the CENVAT Credit Rules, 2004 for reversal of such credit after completion of the services, the revenue s stand requiring such reversal cannot be upheld. The impugned order is set aside - appeal allowed.

Summary

The Tribunal ruled in favor of the appellants, redevelopers involved in the construction of residential complexes, stating that no service tax liability arises on the sale of already built flats after obtaining completion certificates. The Tribunal cited previous decisions to support that the appellants were not required to reverse the service tax credit utilized in the construction. The impugned order was set aside, and all three appeals were allowed with consequential relief to the appellants.