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2024 (7) TMI 865 - AT - Service TaxLevy of service tax - Construction of Complex Services / Construction of Residential Complex Services - Commercial Construction Services for T. Nagar project as well as Construction of Residential Complex Services for Mogappair project - period from April 2005 to December 2009 - HELD THAT - On perusal of the joint venture agreement as well as other agreements, it can be seen that the appellant has been entrusted with the work of construction of flats / complexes. The nature of such composite contracts involve both supply of materials as well as rendition of services. The Tribunal in the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI had considered the issue whether the demand of service tax can be made under Construction of Residential Complex Services / Construction of Commercial Complex Services for the period prior to 01.07.2012. It was held that in the case of indivisible contracts which are composite in nature, the demand can be made only under Works Contract Services. The Tribunal had followed the decision of the Hon ble Apex Court in the case COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT . In the present case, the demand is raised under Construction of Complex Services / Construction of Residential Complex Services. The demand therefore cannot sustain. It is also seen that the demand in respect of T. Nagar project is made for the period after prior to 01.06.2007. It is submitted by the Ld. Counsel that the Completion Certificate for this building was obtained on 02.05.2005. The activity being composite contracts, the demand cannot sustain as per decision in the case of Larsen Toubro Ltd. The demand raised in the present case under Construction of Complex Services / Construction of Residential Complex Services cannot sustain - the impugned order is set aside - appeal allowed.
Issues:
1. Whether the demand of service tax confirmed for Commercial Construction Services and Construction of Residential Complex Services is sustainable. Analysis: The case involved the appellant engaged in providing construction services without obtaining registration and not paying appropriate service tax. The Department issued a Show Cause Notice proposing to demand service tax for the period February 2008 to December 2009. The appellant argued that the demand was not sustainable as the contracts were composite in nature involving both supply of materials and services, citing relevant case laws. The Ld. Counsel for the appellant contended that the demand for service tax on the projects was not under Works Contract Services but under Construction of Complex Services and Construction of Residential Complex Services. The Tribunal's decision in similar cases emphasized that demand for service tax on composite contracts can only be made under Works Contract Services, not under Construction of Complex Services or Construction of Residential Complex Services. The Tribunal's decisions were upheld by the Hon'ble Apex Court, dismissing the Department's appeals. After considering the arguments, the Tribunal concluded that the demand raised under Construction of Complex Services and Construction of Residential Complex Services was unsustainable. The Tribunal relied on previous decisions where it was held that in cases of composite contracts, demand for service tax can only be made under Works Contract Services. The Completion Certificate dates and nature of the contracts were crucial factors in determining the sustainability of the demand. In the final judgment, the impugned order was set aside, and the appeal was allowed with consequential reliefs as per law. The Tribunal's decision was based on the principle that demands for service tax on composite contracts should fall under Works Contract Services, not under Construction of Complex Services or Construction of Residential Complex Services. The judgment was pronounced in open court on 15.07.2024.
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