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2019 (7) TMI 575 - AT - Service TaxCommercial and Residential Construction service - liability of service tax - HELD THAT - Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT has settled the issue regarding the Works Contract which includes supply of material and labour for construction and the same is taxable only from 01.06.2007 - Further, even for the period after 01.06.2007, various decisions of the Tribunal have consistently held that composite contracts or works contracts even after 01.06.2007 cannot be taxed under Construction of Complex Services under section 65 (105)(zzzh) of the Finance Act, 1992. Appeal allowed - decided in favor of appellant.
Issues:
1. Liability to pay service tax on Construction of Complex service. 2. Classification of the contract under Works Contract Service. 3. Interpretation of residential complex for taxation purposes. 4. Applicability of service tax on composite contracts. 5. Validity of the demand and penalty imposed by the Commissioner. 6. Whether the impugned order is sustainable in law. Analysis: 1. The appeal challenged the demand of service tax on the Construction of Complex service rendered by the appellant, covering the period from 11/06 to 06/09. The Commissioner confirmed the demand along with interest and penalties under relevant sections of the Finance Act, 1994. The appellant contended that the contract with the Andhra Pradesh State Housing Corporation Limited falls under Works Contract Service, not liable for service tax pre-01.06.2007, citing judicial precedents like CCE vs. Larsen & Toubro Limited. The appellant argued that the demand under Construction of Complex Service post-01.06.2007 was incorrect, relying on various tribunal decisions. 2. The appellant emphasized that each residential house constructed was independent, with only two units per building, not meeting the criteria of a residential complex with more than 12 units. They cited cases like Macro Marvel Projects Ltd. vs. Commissioner to support their argument. The appellant highlighted that the houses were for weaker sections of society under a government welfare scheme, allotted and not sold, further challenging the revocation of the extended period of limitation. 3. The Tribunal noted the settled issue post-01.06.2007 that composite contracts or works contracts cannot be taxed under Construction of Complex Services. Referring to cases like Mahakoshal Beverages Pvt. Ltd. and Prime Developers Limited vs. CCE, the Tribunal reiterated that services prior to 01.06.2007 were not taxable under commercial or industrial construction service or construction of complex service. The Tribunal concluded that the impugned order was unsustainable, setting it aside and allowing the appeal with consequential benefits. 4. The Tribunal's decision was based on the interpretation of relevant legal provisions, judicial precedents, and the specific facts of the case. The appellant's arguments regarding the nature of the contract, the classification of the construction service, and the applicability of service tax were thoroughly considered and supported by legal authorities. The Tribunal's detailed analysis and reliance on established case law provided a strong basis for overturning the Commissioner's decision and ruling in favor of the appellant.
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