2018 (12) TMI 1040 - AT - Service Tax

Construction service - period involved is 2006-2009 - Site formation and clearance service - real estate projects at Silver County, Platinum County and other projects - non-payment of service tax - non-filing of periodical ST-3 returns. Construction service - period involved is 2006-2009 - Held that - Hon ble Supreme Court in the case of Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT and the decision of this very Bench in the case Real Value Promoters 2018 (9) TMI 1149 - CESTAT CHENNAI , the said activity will be exigible to service tax only under Works Contracts Service and not under Residential Complex Service as has been demanded in the impugned order. In view thereof, there is no hesitation in setting aside the demand of Rs. ? 83,77,188/- with interest thereon under the category of construction of residential complex service. The portion of the impugned order to the contrary demanding the aforesaid amount with interest thereon is set aside. Site formation and clearance service - Held that - The site formation and clearance activity has obviously been done by the appellant by themselves, for themselves. Further neither the agreement for sale had not seen light of the day, nor were the buyers visible on the horizon, at the time when the site formation etc of the land was carried out by the appellant - such activity was a self service and hence the same cannot be exigible to service liability under the Finance Act,1994 - Demand set aside. Appeal allowed in toto.

Summary

Issues Involved:
1. Demand under "residential complex service" for the period 2006-2009.
2. Demand under "site formation and clearance service" for the period 2006-2008.

Analysis:

1. Demand under "Residential Complex Service" for the period 2006-2009:
- The appellants were providing construction services and site formation services for various projects.
- The department issued a show cause notice demanding service tax liability for the construction of a residential complex and site formation services.
- The adjudicating authority confirmed the demands but reduced the amount under construction service and site formation service.
- The appellants argued that the demand under residential complex service was not valid as composite contracts involving transfer of property in goods were not covered under RCS before 01.06.2007.
- The Tribunal agreed with the appellants, citing legal precedents, and set aside the demand of Rs. 83,77,188/- with interest under the construction of residential complex service.

2. Demand under "Site Formation and Clearance Service" for the period 2006-2008:
- The appellants contended that the site formation and clearance activities were self-service as they were undertaken before the sale of land.
- The department argued that the consideration collected from buyers for land development charges indicated a service provider-recipient relationship.
- The Tribunal disagreed with the department's argument, stating that the site formation was done by the appellants to enhance the land's saleability.
- It was concluded that the site formation and clearance activity was self-service and not liable for service tax under the Finance Act, 1994.
- The demand of Rs. 27,76,231/- with interest under the site formation and clearance service was set aside, along with associated penalties.

Conclusion:
- The appeal was allowed in full, with consequential benefits as per law.
- The change of cause title due to the introduction of GST and jurisdiction changes was allowed.

This detailed analysis of the judgment provides insights into the legal issues, arguments presented, and the Tribunal's reasoning for setting aside the demands under the respective services.