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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 ..... d cannot sustain for the reason that the contracts involved are again, composite in nature, involving both rendering of services as well as supply of goods. The Tribunal in the case of Real Value Promoters Pvt. Ltd. and Others Vs. CGST and Central Excise, Chennai [ 2018 (9) TMI 1149 - CESTAT CHENNAI] had observed that even after 1.6.2007 the demand of service tax on composite contracts has to be under works contract services and the demand under Construction of Residential Complex services or Commercial and Industrial Construction services cannot sustain. The decision rendered by the Tribunal in the case of Real Value Promoters was followed by the Tribunal in the case of Jain Housing and Construction Ltd. Vs. CST [ 2018 (9) TMI 1149 - CESTAT CHENNAI] In the said decision, the Tribunal set aside the demands raised under Residential Complex Services observing that the demand raised under such services after 1.6.2007 on composite contracts cannot be sustained. 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 impugned order is se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rasekar appeared and argued for the appellant. The Appellant is engaged in development of commercial and residential projects, which are clearly in the nature of works contract. The Appellant has entered into Joint Development Agreement with land owners for development of the property. In terms of the agreement the Appellant has handed over agreed portion of built-up area of the constructed building / structure to the land owners. 4. Even though as a developer there is no liability to pay service tax prior to 01.07.2010, on such services when the construction is provided in the land owned by them as per Joint Venture agreement, the appellant had discharged service tax on their share and did not discharge service tax with respect to landowner s share. 5. The Department conducted an audit and alleged that the appellant had provided construction services with respect to commercial buildings as well as residential complex and did not discharge service tax on the land owner s portion of built-up area and also short paid service tax in respect of (builders portion) in their own constructed area. 6. The Appellant objected to the SCN and the SOD on the ground that the activity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Industrial Construction services and Residential Complex services is not tenable. That Section 65(105) (zzzza) deals with service tax on works contracts and the said provision has come into force only w.e.f. 01.06.2007. It is submitted that the issue is squarely covered by the decision of the Hon ble Supreme Court in the case of Commissioner of C.Ex. Cus. Kerala Vs Larsen Toubro Ltd. (2015) 39 STR 913 wherein it has been held that works contract services cannot be taxed prior to 01.06.2007 since there was no charging section specifically levying service tax only on works contract. 10. The Appellant relies upon the decision of this Hon ble Tribunal in the case of Real Value Promoters Pvt Ltd Final Order 42436-42438/ 2018 dated 18.09.2018, wherein it has held that works contract cannot be taxed prior to 01.06.2007 and in respect of any contract which is a composite contract service tax cannot be demanded under CICS/CCS for the period after 01.06.2007.The same view has been taken in the case of URC Construction Ltd. (Final Order 42037-42038/ 2016 dated 14.07.2016). 11. The Tribunal in the case of Jain Housing and Construction Ltd Vs CST vide Final Order Nos. 40077-40079/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax the activity in terms of agreements between the builder/developer and the prospective customers for the construction of residential units against payments made in instalments, in terms of which possession of the residential unit is to be handed over to the customer on completion of residential complex and on full payment. The Tribunal further observed that works contracts involving transfer of immovable property were brought within the purview of the taxable service by adding Explanation to Section 65 (105) (zzzh) with effect from 01.07.2010 and therefore it has to be held that such contracts were not covered by Section 65(105)(zzzh) during the period prior to 01.07.2010. The same view is taken in the case of Pragati Edifice Pvt Ltd. Vs Commissioner of CCE ST Final Order No. 31010-31011/2019. South India Shelters Pvt Ltd Vs CCE vide Final Order No. 40123-40124/2023 Jain Housing and Construction Ltd Vs CST vide Final Order Nos. 40077-40079/2023 Vijay Shanthi Builders Ltd. Vs Commissioner of Service Tax (2018) 9 GSTL 257 15. The SCN No.575/2011 dated 24.10.2011 is time barred as none of the ingredients that are required for invoking the extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rived the benefit of receiving the land as consideration and is therefore liable to discharge the service tax on the built up area of land owners portion. So also the contention of the appellant that they are not liable to pay service tax on the builders portion for the reason that it is not yet handed over to the customers cannot be accepted. The learned AR prayed that the appeal may be dismissed. 19. Heard both sides. 20. The issue that arises for consideration is whether the appellant is liable to pay the service tax as demanded in the Show Cause Notice under the category of Construction of Residential Complex services and Commercial or Industrial construction (CRC and CIC). The foremost contention put forward by the learned counsel is that part of the demand is prior to 1.6.2007. The contracts are entirely composite in nature involving both element of service as well as supply of goods. The Hon. ble Supreme Court in the case of Larsen Tubro Ltd. 2015 (39) STR 913 (SC) has held that the demand of service tax on composite contracts cannot be made prior to the introduction of WCS (1.6.2007). Following the said decision, we are of the opinion that the demand prior to 1.6.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reported in (2023) 10 CENTAX 171 (SC) the Hon ble Apex Court upheld the decision of the Tribunal by dismissing the appeal filed by the department. 23. This Tribunal in the case of M/s. GET Power Pvt. Ltd. Vs. CGST and CE vide Final Order 40920/2023 dated 13.10.2023 followed the decision in the case of Jain Housing Ltd. The relevant paragraph reads as under : 14. The Ld. Counsel for the appellant submitted that the demand under the said category cannot sustain for the reason that the nature of contracts are composite in nature. The dispute with regard to denial of benefit of abatement itself establishes that the contracts are composite in nature which involves both element of supply of goods as well as rendering of services. The decision in the case of Real Value Promoters Pvt. Ltd. (supra) would then apply and the demand therefore cannot sustain. The said decision was applied in the case of Jain Housing and Construction Ltd. (supra). The decision of the Tribunal in the said case was upheld by the Hon ble Apex Court as reported in (2023) 10 Centax 171 (SC) [05.09.2023]. The relevant part of the order reads as under : [Order]. - Delay condoned. 2. Mr. N. Venkatr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore only those contracts which were service simpliciter (not involving supply of goods) would be subject to levy of service tax under 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. . 8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. 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 in the light of the Hon‟ble Supreme Court judgment in Larsen Toubro (supra) upto 1.6.2007. b. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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