2023 (10) TMI 231 - AT - Service Tax

Levy of Service Tax - construction of residential complex services - forming a layout consisting of plots for 74 individual houses, entering into a tripartite agreement involving itself, owners of the land and the customers/buyers - sale deeds were executed for selling sites/plots with individual buyers only - extended period of limitation - HELD THAT - Revenue has not disputed the provision of construction service in terms of contract between the parties and the said activity was carried out in a composite manner and hence, there is no possibility to sustain demand up to 01.06.2007 on the above contract. For the subsequent period i.e., post 01.06.2007, in view of the very fact that the demand has been worked out after allowing abatement, no Service Tax could be demanded under construction of complex services simpliciter. In the light of the decision of Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT which has followed by the co-ordinate Hyderabad Bench of the CESTAT in the case of COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, VISAKHAPATNAM - I VERSUS M/S PRAGATI EDIFICE PVT LTD (VICE-VERSA) 2019 (9) TMI 792 - CESTAT HYDERABAD where it was held that no Service Tax as confirmed in the impugned order is justified. The demand confirmed in the impugned order cannot sustain - Appeal allowed.

Summary

Issues:
The judgment involves the issue of levy of Service Tax on the activity of construction of residential complex services without obtaining registration, failure to pay Service Tax, and non-filing of S.T.-3 returns.

Issue 1:
The Revenue contended that the assessee provided construction services without obtaining registration, failed to pay Service Tax, and did not file S.T.-3 returns, justifying the demand of Service Tax under construction of complex services.

The Commissioner held that the Service Tax on construction of residential complex service was applicable from a certain date, and due to the assessee providing the service before that date without proper registration, the extended period of limitation under the proviso to section 73(1) of the Finance Act was invoked.

Issue 2:
The assessee argued that they formed a layout for individual houses, entered into tripartite agreements, and only sold plots to individual buyers, not constructing a complex with more than 12 units.

The appellant contended that the activity could not be taxed under construction of complex service based on a Supreme Court ruling, emphasizing that they only constructed individual residential houses as per approved plans, not a residential complex.

Issue 3:
The Ld. Consultant highlighted that the demand for Service Tax was not sustainable based on the nature of the contracts and the abatement provided, citing relevant legal precedents.

The Tribunal concluded that the demand could not be upheld based on the Supreme Court decision and subsequent rulings by various benches of the CESTAT, setting aside the demand confirmed in the impugned order.

Conclusion:
The Tribunal allowed the appeal, stating that the demand confirmed in the impugned order was not sustainable based on legal precedents and set it aside, providing consequential benefits as per the law.