9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (3) TMI 123 - AT - Service TaxClassification of service - Works Contract Service (WCS) - respondent had received payments from their customers but not shown the taxable value in their ST-3 returns - HELD THAT - This Tribunal taking note of the CBEC Circular No.108/02/2009-ST dated 29.01.2009 in CC, CE ST Vs. Pragati Edifice Pvt. Ltd. 2019 (9) TMI 792 - CESTAT HYDERABAD case has held that it is well settled legal position that whether the service is rendered as service simpliciter or as a works contract no Service Tax can be levied on construction of residential complex prior to 1-7-2010. Conclusion - i) Construction services completed before the execution of a sale deed where the property is transferred post-construction are considered self-service and not subject to service tax prior to 01.07.2010. ii) The CBEC Circular No.108/02/2009-ST applies to cases where construction is completed before sale exempting such transactions from service tax. There are no merit in the appeal filed by the Revenue - Revenue s appeal is dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Applicability of Works Contract Service (WCS) and Service Tax Liability Relevant legal framework and precedents: The definition of Works Contract under Section 65(105)(zzzza) of the Finance Act, 1994, and the applicability of service tax to construction services prior to 01.07.2010 as clarified in various circulars and judicial precedents. Court's interpretation and reasoning: The Tribunal examined whether the respondent's activities constituted self-service or a taxable service under the WCS category. The Tribunal noted that the agreements and payments were structured such that the construction services were completed before the sale of units, aligning with the criteria for self-service as per the CBEC Circular. Key evidence and findings: The Tribunal reviewed sample agreements between the respondent and buyers, which indicated that construction was completed before the sale, supporting the respondent's claim of self-service. Application of law to facts: The Tribunal applied the CBEC Circular No.108/02/2009-ST, which states that construction activities completed before the execution of a sale deed are considered self-service and not liable to service tax. Treatment of competing arguments: The Revenue argued that the agreements indicated a taxable service under WCS, but failed to present evidence contradicting the respondent's agreements showing completed construction before sale. Conclusions: The Tribunal concluded that the services provided by the respondent were not taxable under WCS prior to 01.07.2010 due to the self-service nature of the transactions. 2. Applicability of CBEC Circular No.108/02/2009-ST Relevant legal framework and precedents: The Circular clarifies the non-applicability of service tax on certain construction services prior to 01.07.2010. Court's interpretation and reasoning: The Tribunal interpreted the Circular as applicable to the respondent's case, as the construction was completed before the sale, qualifying as self-service. Key evidence and findings: The Tribunal found that the respondent's agreements and payment structures aligned with the Circular's criteria for self-service. Application of law to facts: The Tribunal applied the Circular to exempt the respondent from service tax liability for the period in question. Treatment of competing arguments: The Revenue's contention that the Circular was inapplicable was dismissed due to lack of evidence contradicting the respondent's compliance with the Circular's conditions. Conclusions: The Tribunal upheld the applicability of the Circular, exempting the respondent from service tax liability for the period prior to 01.07.2010. 3. Limitation on the Show-Cause Notice Relevant legal framework and precedents: The limitation period for issuing show-cause notices under the Finance Act and relevant judicial precedents, including the Nizam Sugar Factory case. Court's interpretation and reasoning: The Tribunal considered whether the 2014 show-cause notice was barred by limitation due to prior proceedings initiated in 2008 for the same project. Key evidence and findings: The Tribunal noted that the Department had initiated proceedings on the same project in 2008, which could potentially bar the 2014 notice. Application of law to facts: The Tribunal found that the 2014 notice was indeed barred by limitation, referencing the Nizam Sugar Factory precedent. Treatment of competing arguments: The respondent's argument of limitation was upheld, while the Revenue's failure to address this effectively led to dismissal of their appeal. Conclusions: The Tribunal concluded that the show-cause notice was barred by limitation, further supporting the dismissal of the Revenue's appeal. SIGNIFICANT HOLDINGS The Tribunal upheld the adjudicating authority's decision to drop the service tax demand against the respondent. The core principles established include:
The Tribunal dismissed the Revenue's appeal, affirming that the respondent was not liable for service tax under the circumstances and period in question.
|
