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2023 (3) TMI 580 - AT - Service TaxLevy of Service Tax - consideration received for construction services which are composite in nature including both supply of materials and provision of services - period prior to 01.06.2007 - HELD THAT - The said issue stands answered in the case of SPRINGFIELD SHELTERS P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, COIMBATORE 2018 (10) TMI 1280 - 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. The demand cannot sustain and requires to be set aside - Appeal allowed.
Issues:
Whether the appellant is liable to pay service tax on the consideration received for construction services which are composite in nature including both supply of materials and provision of services for the period prior to 01.06.2007. Analysis: The appellant, M/s. Sakthi Constructions India Pvt. Ltd., was found to have not discharged service tax on the entire consideration received for providing 'Construction of Residential Complex Service' from June 2005 to September 2006. The original authority confirmed the demand for short paid service tax along with interest and penalties. The Commissioner (Appeals) upheld the order but granted cum tax benefit. The appellant appealed to the Tribunal, arguing that the contracts were composite in nature, including both supply of materials and services, and thus, the duty demand should be quantified after allowing abatement. They relied on the decision of the Hon'ble Apex Court in the case of CCE & Cus. Kerala Vs Larsen & Toubro Ltd. to support their argument. Additionally, they cited the Tribunal's decision in the case of Springfield Shelters P. Ltd. Vs CCE & ST to assert that the demand for the period prior to 01.06.2007 should be set aside. The Tribunal considered whether the appellants are liable to pay service tax on the consideration received for construction services that are composite in nature, involving both supply of materials and provision of services, for the period before 01.06.2007. Referring to the decision of the Hon'ble Apex Court in the Larsen & Toubro Ltd. case, the Tribunal observed that there can be no levy of service tax on composite contracts prior to 01.06.2007. The Tribunal noted that composite contracts were brought within the ambit of the levy of service tax only with effect from 1.6.2007 by the introduction of Section 65(105)(zzzza) i.e. Works Contract Services. It was highlighted that only contracts involving service simpliciter (not including supply of goods) would be subject to the levy of service tax under Construction of Residential Complex Service prior to 01.06.2007 and after. The Tribunal concluded that the demand cannot be sustained and set it aside, allowing the appeal with consequential relief, if any, as per law. In conclusion, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief, if any, as per law. The decision was pronounced in open court on 07.03.2023.
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