2025 (3) TMI 9 - AT - Service Tax

Classification of service - Works Contracts Service (WCS) or Construction of Residential Complex Service (CRCS) - HELD THAT - Upto 1.7.2010 the classification of service would remain the same as declared by the service provider but however post-1.7.2010 the tax would be chargeable under Construction of Complex Service if it is service simpliciter and under Works Contract Service if it is a composite works contract. From the discussions in the respective Orders-in-Original there is no dispute that (i) the nature of work was under composite contract and (ii) in respect of ongoing projects commenced prior to 1.6.2007 for which the appellant had already remitted the service tax under SCS though no service tax in respect of a composite contract was leviable in view of decision in L T Ltd. 2015 (8) TMI 749 - SUPREME COURT . In any case it is an admitted fact on record that during the periods under dispute the appellant continued to remit the service tax under WCS and hence there was no reason for the Revenue not to accept the same. Hence in the light of decision of Larsen Toubro Ltd which has been followed by various Benches of Tribunal across India the liability as under CRCS cannot sustain. Since the issue of interpretation was involved there cannot be any scope of to allege suppression or whatsoever and hence no penalty could be exigible and hence demand and penalties are set aside. Conclusion - The liability for service tax under CRCS cannot sustain for the period before 1-7-2010. Appeal disposed off.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the demand of service tax under "Works Contracts Service" (WCS) as upheld in the impugned orders is justifiable?The detailed analysis of the issues is as follows:The appellant provided services under 'Construction of Residential Complex Service (CRCS)'. The Revenue noticed that the appellant filed returns under WCS instead of CRCS for certain periods. Show cause notices were issued proposing to recover tax, interest, and penalties. The Adjudicating Authority confirmed the demands. The appellant contended that the demands should not stand based on a previous decision of the Hon'ble Supreme Court and a decision by the same Bench in a similar case. The Assistant Commissioner relied on findings of lower authorities and referred to precedents. The Tribunal considered various decisions and held that no service tax could be levied on construction of residential complexes prior to 1-7-2010. The Tribunal set aside the demands for the period before 1-7-2010. For the period April 2011-June 2012, where the appellant did not pay tax under CRCS or WCS, the Revenue was allowed to collect the admitted tax liability under WCS.Significant holdings:- The liability for service tax under CRCS cannot sustain for the period before 1-7-2010.- The demands and penalties were set aside due to the interpretation of the law.- For the period April 2011-June 2012, the Revenue could collect the admitted tax liability under WCS.The Tribunal pronounced the order on 28.02.2025.