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2019 (2) TMI 90 - AT - Service TaxConstruction servcies - works contract service - Transport of Goods by Road service - relevant records to the department for verification of the correctness of the service tax paid by them - period September 2004 to September 2008 not furnished - short payment for the period from 1.1.2005 to 30.9.2008 - Held that - The contracts entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service. The Tribunal in the case of Real Value Promoters Ltd. 2018 (9) TMI 1149 - CESTAT CHENNAI had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts - Further, it was held that after 1.6.2007, demand in respect of composite contracts would fall under works contract service only. The demand of service tax under commercial or industrial construction service (residential complex) cannot sustain after the period 1.6.2007 - The levy of service tax prior to 1.6.2007 cannot also sustain. GTA Service - Held that - Since the appellants are not contesting the same, that portion of the impugned order is not interfered with. Appeal allowed in part.
Issues Involved:
1. Classification of services under 'Commercial and Industrial Construction Service', 'Construction of Residential Complex Service', and 'Works Contract Service'. 2. Applicability of service tax on composite contracts prior to and after 1.6.2007. 3. Demand under Goods Transport Agency (GTA) Service. Issue-wise Detailed Analysis: 1. Classification of Services: The appellants were engaged in rendering services under multiple categories, including 'Commercial and Industrial Construction Service', 'Construction of Residential Complex Service', 'Works Contract Service', and 'Transport of Goods by Road'. The primary contention was whether the services provided fell under 'Commercial or Industrial Construction Service' or should be classified under 'Works Contract Service' due to the composite nature of the contracts. 2. Applicability of Service Tax on Composite Contracts: The Tribunal analyzed whether the service tax demand for the period from 1.1.2005 to 30.9.2008 under 'Commercial or Industrial Construction Service' and 'Transport of Goods by Road Service' was sustainable. The contracts in question were composite, involving both supply of materials and rendering of services. The Tribunal referred to the precedent set in the case of Real Value Promoters Ltd. Vs. CCE, which held that prior to 1.6.2007, service tax could only be levied on contracts that were purely for services. After 1.6.2007, composite contracts fell under 'Works Contract Service' as defined under section 65(105)(zzzza) of the Finance Act, 1994. The Tribunal cited the Union Finance Minister’s budget speech in 2007 and the Hon’ble Apex Court’s decision in Larsen & Toubro case, which emphasized that composite contracts could not be taxed under service categories prior to 1.6.2007. 3. Demand under Goods Transport Agency (GTA) Service: The appellants did not contest the demand under GTA service, and thus, the Tribunal did not interfere with this portion of the impugned order. Conclusion: The Tribunal concluded that the demand of service tax under 'Commercial or Industrial Construction Service' and 'Construction of Residential Complex Service' could not be sustained for the period prior to 1.6.2007, as these services were part of composite contracts. For the period after 1.6.2007, such composite contracts should be classified under 'Works Contract Service'. Consequently, the service tax demand under 'Commercial or Industrial Construction Service' was set aside. However, the demand under GTA service was upheld as it was not contested by the appellants. The appeal was partly allowed, providing consequential relief to the appellants. Operative Portion: The impugned order demanding service tax under 'Construction of Complex Service' was set aside, and the appeal was partly allowed with consequential relief, if any. The operative portion of the order was pronounced in open court.
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