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2024 (6) TMI 392 - AT - Service TaxLevy of service tax - advances received by the appellant for construction of residential projects - taxability prior to 01.07.2010 - amounts received by the appellant for additional works done for the existing projects. Levy of service tax - advances received by the appellant for construction of residential projects - taxability prior to 01.07.2010 - HELD THAT - The Board vide Circular No.108/2/2009 dated 29.01.2009 has clarified that Promoter/Builder/Developer is not liable to pay service tax prior to 01.07.2010 - The Tribunal in the case of M/S KRISHNA HOMES VERSUS CCE, BHOPAL AND CCE, BHOPAL VERSUS M/S RAJ HOMES 2014 (3) TMI 694 - CESTAT AHMEDABAD in a similar issue has held that the demand of service tax against promoter/builder/developer cannot sustain for the period prior to 01.07.2010 - thus, the demand raised for advances received by the appellant for construction of residential projects is unsustainable. Levy of service tax - Construction of Residential Complex Services - amounts received by the appellant for additional works done for the existing projects - HELD THAT - The appellant has submitted that the works carried out were composite in nature and not service simplicitor. The Commissioner (Appeals) after taking note of the use of materials has allowed the abatement, which establishes that the works are composite in nature. The 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 had held that the demand of service tax for composite contracts can only be made under Works Contract Services. The demand raised under Construction of Residential Complex Services, therefore cannot sustain and is set aside. The impugned order is set aside - The appeal is allowed.
Issues involved:
The issues involved in the judgment are: 1. Whether the demand of service tax on advances received by the appellant for construction of residential projects is subject to levy of service tax prior to 01.07.2010. 2. Whether the demand raised on amounts received for carrying out additional works in existing projects under Construction of Residential Complex Services is sustainable. Issue 1 - Demand of Service Tax on Advances for Construction of Residential Projects: The appellant, engaged in promoting residential projects, received advances for ensuing projects and additional works at existing flats without paying service tax. The Show Cause Notice proposed service tax under 'Construction of Residential Complex Services'. The appellant argued that as a developer, they are not liable to pay service tax for the period before 01.07.2010 as per Board Circular No.108/2/2009. The demand was for the period from August 2005 to October 2008. The Tribunal referred to a similar case and held that the demand of service tax against the promoter/builder/developer cannot sustain for the period before 01.07.2010. The demand on advances received for construction of residential projects was deemed unsustainable. Issue 2 - Demand on Amounts for Additional Works in Existing Projects: The second issue pertained to the demand raised on amounts received for additional works in existing projects under Construction of Residential Complex Services. The appellant argued that the works were composite in nature involving both supply of materials and services. The Commissioner (Appeals) allowed abatement after considering the use of materials, indicating the composite nature of the works. Citing a previous case, the Tribunal held that demand for composite contracts can only be made under Works Contract Services, not under Construction of Residential Complex Services. Therefore, the demand on amounts received for additional works in existing projects was set aside. In conclusion, the impugned order was set aside, and the appeal was allowed with consequential reliefs, if any.
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