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2019 (1) TMI 442 - AT - Service TaxClassification of services - construction activities - whether classified under Construction of Complex Services or not - benefit under works contract - N/N. 18/2005-ST 1/2006-ST - period in dispute is 16.06.2005 to 31.03.2009 - Held that - Reliance placed 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 , where it was held that the services provided by the appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial construction service or construction of complex service. For the period after 1.6.2007, service tax liability under category of commercial or industrial construction service‟ under Section 65(105)(zzzh) ibid, Construction of Complex Service‟ under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services‟ simpliciter. Appeal allowed - decided in favor of appellant.
Issues Involved:
- Classification of construction activities under Residential Complex Services - Eligibility for abatement in construction activities completed prior to 16.06.2005 - Applicability of Notification Nos. 18/2005-ST & 1/2006-ST and benefits under Works Contract - Taxability of composite works contract under Commercial or Industrial Construction Service (CICS) or Construction of Complex Service (CCS) Issue 1: Classification of construction activities under Residential Complex Services The appellant, engaged in construction of residential complexes, faced a Show Cause Notice (SCN) alleging that their activities fell under Residential Complex Services, leading to a demand for service tax. The Commissioner confirmed the demand but revised the amount, citing the appellant's ineligibility for abatement and justifying the demand under construction of residential complex services for both projects. The appellant challenged this classification. Issue 2: Eligibility for abatement in construction activities completed prior to 16.06.2005 The appellant argued that the service component in composite works contracts became taxable under works contract services from 01.06.2007, referencing a Supreme Court case. They also highlighted a Tribunal order to support their claim that the demands were wrongly confirmed under CCS for composite works contracts, asserting that the impugned demand was unsustainable. Issue 3: Applicability of Notification Nos. 18/2005-ST & 1/2006-ST and benefits under Works Contract The Revenue, supporting the adjudicating authority, relied on previous orders to back the demand. However, the Tribunal found these references inconclusive for the present case, as they did not address the specific taxability issue in question. The Tribunal cited a recent order that clarified the tax liability for services provided in composite works contracts, emphasizing the need for service tax under Works Contract Service for such activities. Issue 4: Taxability of composite works contract under CICS or CCS The Tribunal analyzed various legal precedents and determined that for activities involving composite works contracts, service tax could not be demanded under CICS or CCS. The Tribunal referred to a specific clause stating that demands for service tax under CICS or CCS could not sustain for periods before and after 1.6.2007. Consequently, the Tribunal set aside the demand and the impugned order, allowing the appeal with appropriate reliefs as per law. This detailed analysis of the judgment showcases the legal intricacies involved in the classification of construction activities under different service categories and the significance of legal precedents in determining tax liabilities for composite works contracts.
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