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2023 (4) TMI 349 - AT - Service TaxLevy of service tax - construction of residential complex service (CRCS) - whether the authority below is justified in demanding Service Tax from the appellant under works contract service for the period from December 2009 to September 2010? - HELD THAT - The Order of the co-ordinate Hyderabad Bench of the CESTAT in the case of M/s. Pragati Edifice Pvt. Ltd. 2019 (9) TMI 792 - CESTAT HYDERABAD is a more recent one, which has considered many orders of other co-ordinate Benches and also the decision of the 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 - it has been categorically held that no Service Tax could be levied on construction of residential complexes prior to 01.07.2010 even when the service is rendered either as service simpliciter or as a works contract. Evidently, in the case on hand, the period of dispute is up to September 2010 and hence, in view of the above, the liability to Service Tax, if any, is restricted to the period post 01.07.2010. The demand for the period post 01.07.2010 is upheld and the demand for the period prior to this date, is set aside - The matter is remanded to the Adjudicating Authority for the limited purpose of calculating the Service Tax liability and interest, as above, after following the principles of natural justice. The appeal stands partly allowed and partly remanded.
Issues involved:
The issue involves determination of Service Tax liability on construction of residential complex for the period from December 2009 to September 2010 under works contract service. Summary: Issue 1: Service Tax liability under works contract service for the period from December 2009 to September 2010 The appellant, engaged in construction of residential complexes, entered into composite contracts with buyers. The Revenue alleged that the activities were taxable under works contract service and issued a Show Cause Notice for Service Tax liability of Rs. 54,25,812 for the period in question. The appellant contended that no Service Tax was due prior to July 2010 based on exemptions and correctly remitted tax from July 2010 under a different category. The Commissioner confirmed the demand, leading to the appeal. Issue 2: Interpretation of legal position regarding Service Tax on construction of residential complexes The appellant argued that no Service Tax could be levied on construction of residential complexes before July 2010, citing various judicial orders. The Revenue relied on the impugned order and a previous Bench decision to support their position that Service Tax was applicable post-June 2007 for composite contracts. Judgment: After considering the arguments, the Tribunal referred to a recent decision by the Hyderabad Bench which clarified the legal position. It was established that no Service Tax could be levied on construction of residential complexes before July 2010, whether under service simpliciter or as a works contract. Therefore, the demand for the period post-July 2010 was upheld, while the demand for the period prior to this date was set aside. The matter was remanded to the Adjudicating Authority for calculating the Service Tax liability and interest for the applicable period. Conclusion: The appeal was partly allowed and partly remanded for further proceedings in accordance with the legal principles discussed.
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