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TMI Blog2024 (6) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... CHENNAI [ 2018 (9) TMI 1149 - CESTAT CHENNAI] had analysed the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1-6-2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1-6-2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts. Further, it was held that after 1-6-2007, demand in respect of composite contracts would fall under works contract service only. The decision in Real Value Promoters is squarely applicable to the facts of the case in present appeals. The demand made under construction of residential complex service/construction of Commercial or Industrial Construction cannot therefore sustain. Extended period of limitation - HELD THAT:- The payment of tax under works contract service also disclosed by the appellant along with ST-3 return filed before the Jurisdictional Authority. In this circumstances charge of suppression or willful misstatement do not survive against the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services not taken. For the service provided by the Appellant during the period 01.03.2013 to 31.03.2014, abatement of 75% has been provided under Notification No. 02/2013-ST dated 01.03.2013 (Sr. No. 12) as amended vide Notification No. 09/2013-ST dated 08.05.2013 ( Sr. No. 12). It appears that the appellant is entitled for the abatement of 75% but not entitled for any Cenvat credit upto the period June 2012. During the scrutiny of the documents it is noticed that the appellant were required to pay total Service tax of Rs. 48,24,372/- during the period 2010-11 to 2013-14. Out of total service tax of Rs. 48,24,372/- the amount of Cenvat credit available for utilization was only Rs. 31,30,615/- considering the amount of Cenvat credit balance of Rs. Rs. 9,59,407/-as shown in their ST-3 return for the period October 2013 to March 2014. Since the Appellant has already paid the amount of Rs. 31,30,615/- from Cenvat account, they are required to pay Rs. 16,93,757/- from cash account by challan. Further the appellant has declared undisclosed income of Rs. 2,00,00,000/- before the Income Tax department, which appears to be received prior to the year 2012-13 and the said income was generate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her submits that Appellant were registered under composition scheme with Gujarat VAT Department and has paid VAT under composition scheme with Gujarat VAT department. Board circular bearing F.No. B1/16/2007-TRU states that contracts which are treated as works contract for purpose of the VAT /sales tax, shall also be treated as works contract for the purpose of levy of service tax. Thus considering the facts of the case and considering the activities performed by the appellant, it is clear that there transfer of property in goods is involved and in execution of such contract is leviable to tax as sale of goods. Further there is contract between developer and the customer wherein the developer is required to construct the residential unit for the customers. Thus considering the same the activities of the appellant falls under the category of works contract services. Further the appellant pays the VAT to the Commercial Tax department. Thus the appellant s case clearly falls under the sub-clause (i) of Section 65 (105) (zzzza) of the Finance Act 1994 and thus the said activity clearly falls under the activity of the works contract services. 5. He also submits that purchase of under-con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant is under bonafide belief that the issue is purely interpretation in nature. Appellant have furnished all information required, as and when sought by the department. Further appellant were regularly filing their ST-3 returns wherein all the facts are disclosed by the appellant regarding availment of CENVAT credit, untilzation towards service tax liability for providing works contract services. Hence the demand is hit by time bar. 8. On other hand Shri A.K. Samota, learned Superintendent (AR) supported the findings of impugned order. 9. On careful consideration of the submissions made by both sides and perusal of records, we find that from the facts itself, it is clear that the construction services rendered by the appellants are composite in nature involving materials as well as services. The documentary evidence produced by the appellant in form of VAT Audit Report, payment of VAT/Sale Tax, copy of agreements with developer and sub-contractors clearly prove the said fact. We find the Tribunal in the case of Real Value Promoters 2018-TIOL-2867-CESTAT-MAD (supra) had analysed the issue regarding demand of service tax under construction of residential complex services, commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service. These decisions were based on various decisions of higher appellate forums, where it has been held that the show cause notice is the foundation of allegations and the adjudication should be limited to the allegations. Further, as per Section 65A of the Act, classification of service shall be based on the specific entries and the more specific description has to be preferred. In this connection, he invited attention to C.B.E. C. s Circular No. 128/10/2010, dated 24-8-2010. 3.8 If show cause notices are issued demanding service tax under CICS/CCS, on composite contracts, involving transfer of property in goods, for the period post 1-6-2007, the said demands of service tax cannot be sustained, as these services would cover only pure service activities, as held by the Hon ble Supreme Court in Larsen Toubro (supra). At the stage of adjudication or appeal proceedings, the demand cannot be confirmed under WCS, when the show cause notice raises demand on CICS/CCS. Such an attempt would amount to travelling beyond the scope of the show cause notice, which is not permissible. 3.9 Though the definition of WCS incorporates the definitions of CICS/CCS into it, the scope of coverage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the periods also after 1-6-2007 for the periods in dispute in these appeals. For this very reason, the proceedings in all these appeals cannot sustain. 10. We find that the decision in Real Value Promoters (supra) is squarely applicable to the facts of the case in present appeals. The demand made under construction of residential complex service/construction of Commercial or Industrial Construction cannot therefore sustain. 11. We also find that service tax can be demanded only under Works Contract Service from 1-6-2007 as held in the Commissioner of Central Excise Kerala v. Larsen and Toubro - 2015 (39) S.T.R. 913 (S.C.). The current demand is under Construction of Complex Services giving abatement on the gross amounts charged. It has been held by Supreme Court in para 17 of this judgment that a works contract is a separate species of contract distinct from contracts for services simpliciter recognized by the world of commerce and law as such, and has to be taxed separately as such. In Gannon Dunkerley, 1959 SCR 379 = 2015 (330) E.L.T. 11 (S.C.), this Court recognized works contracts as a separate species of contract . For all these above reasons also the impugned order confir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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