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2024 (5) TMI 567 - AT - Service TaxRendering of construction services mainly to Government organizations - Failure to file ST-3 returns for the period from October 2009 for Management, Maintenance or Repair Service - availment of abatement of 67% while discharging service tax on Erection, Commissioning or Installation services - whether the demand of service tax raised under Construction of Residential Complex Service (RCS), Commercial or Industrial Construction Service (CICS) and Erection and Commissioning or Installation Services (ECIS) for the period 1.10.2007 to 31.3.2012 is sustainable or not? - HELD THAT - It is seen from the records that the appellant has carried out contracts of composite nature which involves both use of materials as well as rendition of services. The demand of tax in the show cause notice has been quantified granting benefit of abatement which would establish that the contracts are composite in nature. The issue as to whether the demand of service tax can be made under RCS, CICS or ECIS in composite contracts was decided by Tribunal in the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI . The said decision was followed by the Tribunal in the case of M/S. JAIN HOUSING CONSTRUCTION LIMITED VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI 2023 (2) TMI 1044 - CESTAT CHENNAI which has been maintained by the Hon ble Apex Court. Further in the case of M/S. SRINIVASA SHIPPING PROPERTY DEVELOPERS LTD. VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2023 (12) TMI 1003 - CESTAT CHENNAI had followed the decision in the case of Real Value Promoters and set aside the demand. In the case of DELHI JAL BOARD CONTRACTORS WELFARE ASSOCIATION VERSUS UOI AND ORS 2018 (10) TMI 1702 - DELHI HIGH COURT ), the Hon ble High Court held that in the case of indivisible composite works contract the demand under Erection and Commissioning or Installation Services cannot be sustained. The demand raised under the above three categories cannot sustain and requires to be set aside. The impugned order is set aside - Appeal allowed.
Issues:
The issues involved in the judgment are the demand of service tax raised under Construction of Residential Complex Service (RCS), Commercial or Industrial Construction Service (CICS), and Erection and Commissioning or Installation Services (ECIS) for the period from 1.10.2007 to 31.3.2012. Construction of Residential Complex Service (RCS): The appellant argued that the construction activities carried out were composite in nature involving materials and services, and the demand under RCS cannot sustain prior to 1.7.2012. They relied on a Tribunal decision and a Supreme Court ruling supporting their position. The Tribunal noted that the demand quantified in the show cause notice granted abatement, indicating composite contracts. Citing precedents, the Tribunal set aside the demand under RCS, concluding in favor of the appellant. Commercial or Industrial Construction Service (CICS): The appellant contended that the demand under CICS was not sustainable prior to 1.7.2012 due to the composite nature of the construction activities. They referenced a Tribunal decision and a Supreme Court judgment to support their argument. The Tribunal observed that the contracts involved both materials and services, and the demand under CICS was set aside based on previous rulings and the nature of the contracts. Erection and Commissioning or Installation Services (ECIS): Regarding ECIS, the appellant argued that the demand for the period before 1.7.2012 was not valid as the contracts were composite in nature. They cited relevant Tribunal and Supreme Court decisions. The Tribunal found that the demand under ECIS could not be sustained for the specified period due to the composite nature of the contracts, aligning with previous legal interpretations. Consequently, the demand under ECIS was set aside in favor of the appellant. Final Decision: In conclusion, the Tribunal set aside the demand of service tax under Construction of Residential Complex Service, Commercial or Industrial Construction Service, and Erection and Commissioning or Installation Services for the period from 1.10.2007 to 31.3.2012. The impugned order was overturned, and the appeal was allowed with any consequential relief.
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