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TMI Blog2023 (12) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs on the basis of joint development agreement entered into with the land owners. It was noted by the department that appellant sold the undivided share of land to the customers, on the strength of power of attorney given by the land owners and provided construction service to such customers in terms of agreements entered with customers. As per the Joint Venture agreement, the appellant handed over agreed percentage of built up right over the land. On verification, it was noted that though the appellant discharged service tax on the builders portion (built up area) had not discharged the service tax on the land owners portion (built up area given to land owner). In regard to the construction of Matrix Tower, the appellant had not discharged appropriate service tax on the builders share also. Show Cause Notice dated 24.10.2011 was issued for the period April 2006 to September 2010 proposing to demand the short paid service tax along with interest and for imposing penalties. Subsequently, statement of demand was issued for the period October 2010 to September 2011 raising the very same allegations and proposing to demand service Tax along with interest and for imposing penalty. Afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-Original No.29 & 30/2013 dated 29.03.2013 confirmed Service Tax under Construction of Commercial or Industrial Construction services as well as under Residential Complex services on the ground that the services of the appellant are not classifiable under works contract service; that the case laws relied upon by the Appellant cannot be made applicable to the facts of the case. Further extended period is invocable as the Appellant has suppressed the facts. The Order in Original however has set aside the demand for the extent of Rs.12,48,212/- out of the total demand of Rs.31,50,404/- proposed vide SOD No.257/2012 on the ground that there is overlapping of demand with respect to project SSPDL Crescent. 8. The activity of the appellant merits classification under the category 'works contract service'. The appellant is in the business of executing works contract. These are basically contracts, which involve both material and services and are indivisible contracts in contrast to pure contract of supply of materials. Therefore, demand of service tax under commercial or industrial construction services / construction of residential complex services is not tenable. 9. The Department has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Visanthi & Co. vide F.O.No.40937/2023 dt.12.10.2023 The Adjudicating Authority has relied upon the decision in the case of Nagarjuna Construction to deny the benefit of abatement under Notification 1/2006. It is submitted that the said decision cannot be made applicable in view of the subsequent decision of the Hon'ble Supreme Court in the case of L & T referred to supra. Without prejudice to the above contention the Appellant would like to make the following submissions: The Finance Act, 2010 has for the first time brought developers into the ambit of service w.e.f 01.07.2010 through the introduction of explanation to Section 65(105)(zzq) as well as 65(105)(zzzh) and hence there is no question of service tax on developers prior to 01.07.2010. The explanation clearly states that "a builder or any person authorized by the builder.....shall be deemed to be service provided by the builder to the buyer". Therefore there is no liability to pay service tax prior to 01.07.2010 as a developer. 13. The Tribunal in the case of R.F Properties & Trading Ltd Vs CCE 2013 (31) STR 578 has held that in view of the explanation to Section 65(105)(zzq) w.e.f. 01.07.2010 there cannot be a dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enable. Entire facts were known to the department as early as in 2010. The department had issued Show Cause Notice No.353/2010 for the period April 2007 to September 2009 proposing to demand service tax under real estate agency services. Therefore, there is no suppression and extended period is not invocable. 17. The Appellant places reliance on the decision in the case of Paro Food Products Vs CCE (2005) 184 ELT 50 wherein it has been held that all grounds possible should be taken by the department in initiating one proceedings only and that after conclusion of a proceeding for same period department cannot issue Show Cause Notice on another ground. 18. The learned AR Shri M. Ambe appeared and argued for the department. It is submitted by the learned AR that the appellant though registered under commercial construction services and residential complex services has not discharged the service tax on the land owners portion. The discussions made by the adjudicating authority in para 6 to 16 was adverted to by the learned AR who argued that the demand raised as per the Show Cause Notices under construction of residential complex services and commercial construction services for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of service tax only with effect from 1.6.2007 by introduction of Section 65 (105) (zzzza) i.e Works Contracts Services. As pointed out by the Ld. counsels for appellants, there is no change in the definition of CICS/CCS/RCS after 1.6.2007. Therefore only those contracts which were service simpliciter (not involving supply of goods) would be subject to levy of service tax CICS/CCS/RCS prior to 1.6.2007 and after. Our view is supported by the fact that the method / scheme for discharging service tax on the service portion of composite contract was introduced only in 2007". 22. The decision rendered by the Tribunal in the case of Real Value Promoters (Supra) was followed by the Tribunal in the case of Jain Housing and Construction Ltd. Vs. CST Final Order No.40077 to 40079/2023). page 77 In the said decision, the Tribunal set aside the demands raised under Residential Complex Services observing that the dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of CCE & Customs, Kerala Vs Larsen and Toubro Ltd. - 2015 (39) STR 913 (SC) had analyzed the very same issue and held that the demand under WCS in the nature of composite contract (construction of residential complex service, commercial or industrial construction service, erection, commissioning and installation service) cannot sustain when it involves composite contracts which includes both supply of goods / materials as well as rendering of services. 9. The Tribunal in the case of Real Value Promoters Pvt. Ltd. (supra) had considered the issue as to whether even after 1.6.2007, the levy under CICS or CRC etc. is sustainable when the works executed are composite in nature. The relevant part of the order reads as under : "7.10 The issue was analyzed by the Hon‟ble Apex Court in Larsen & Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead to the strong conclusion that composite contracts were brought within the ambit of levy of service tax only with effect from 1.6.2007 by introduction of Section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in Jain Housing and Construction Ltd. Vs CST - (2023) 10 Centax 170 (Tri-Mad) [24.02.2023] and the demand was set aside. The department filed appeal before the Hon'ble Supreme Court against the order passed by the Tribunal. The Supreme Court dismissed the appeal filed by the department as reported in (2023) 10 Centax 171 (SC) [05.09.2023]. 11. From the discussions made above, we hold that the demand under 'Commercial or Industrial Construction Services' (CICS) cannot sustain and requires to be set aside which we hereby do. The appeal is allowed with consequential relief, if any, as per law. 25. We take note of the fact that the decision of the Tribunal in the case of Real Value Promoters Ltd. (Supra) which has been relied in the case of M/s. Jain Housing and Construction Ltd. (Supra) has been affirmed by the Hon'ble Apex Court. 26. After appreciating the facts and evidence placed before us and following the decisions cited (supra), we are of the considered opinion, that the demands raised under construction of Residential Complex Services and Commercial or Industrial Construction Services for the disputed period cannot be sustained and requires to be set aside. The ..... 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