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TMI Blog2024 (7) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... t as per Notification 1/2006 which establishes that the work executed are composite in nature. As per the decision rendered by the Apex court in the case of CCE Vs. Larsen Toubro [ 2015 (8) TMI 749 - SUPREME COURT] and followed by Real Value Promoters Pvt Ltd., [ 2018 (9) TMI 1149 - CESTAT CHENNAI] the demand of service tax for rendering construction service which are composite in nature can be only under works contract services. In the present case, the demand raised under CICS, therefore cannot sustain. The decision in the case of Real Value Promoters was applied by the Tribunal in the case of Jain Housing Construction Limited versus the Commissioner of Service Tax, Chennai [ 2023 (2) TMI 1044 - CESTAT CHENNAI] whereby the demand raised under Construction of Residential Complex services for the period prior to 01.07.2012 was set aside - Though the department filed appeal against the said order before the Hon ble Apex Court, the decision of the Tribunal was sustained by Hon ble Apex Court by dismissing the department appeal as reported in [ 2023 (9) TMI 816 - SC ORDER] . After appreciating the facts, and following the above decisions it is held that the demand raised under CICS fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with the Notification No.1/2006. This would establish that the contracts were composite in nature. The appellant had pleaded before the original authority that the contracts being composite in nature would fall under Works Contract Services. However, the adjudicating authority has confirmed the demand under CICS as proposed in the show cause notice. It is submitted that the work orders executed by the appellant being composite supply, the demand under CICS cannot sustain. To support this argument, the decision rendered by the Tribunal in the case of Real Value Promoters Pvt. Ltd., vide Final Order No. 42436-42438/2018 dated 18.09.2018 was relied. It is submitted that, in the appellant's own case reported in (2017) 50 S.T.R. 147 the Tribunal observed that the very fact that abatement was allowed would establish that the contracts are composite. 4. The decision of the Tribunal in the case of M/s. Central Park West Venture Vs. The Commissioner of CGST CE, Chennai vide Final Order No. 40539/2024 dated 10.05.2024 was also relied by the Ld. Counsel to argue that when demand was not made under WCS for composite contracts, the demand was set aside. 5. Another contention raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sustainable or not for the period prior to 01.07.2012. It is brought out from the facts that the assessee has rendered construction services to M/s. HAL and M/s. Bharath Earth Movers Ltd. The types of work executed have been listed in para 3.2 of the show cause notice dated 23.04.2012. on perusal of these work orders it is very much clear that the construction works are composite in nature involving both supply of goods as well as rendition of services. Moreover, for quantifying the demand, the department had allowed 67% abatement as per Notification 1/2006 which establishes that the work executed are composite in nature. As per the decision rendered by the Apex court in the case of CCE Vs.Larsen Toubro and followed by Real Value Promoters Pvt Ltd., (supra) the demand of service tax for rendering construction service which are composite in nature can be only under works contract services. In the present case, the demand raised under CICS, therefore cannot sustain. 11. Our view is supported by the decision rendered in the case of M/s. Central Park West Venture Vs. Commissioner of CGST CE vide Final Order No.40539/2024 dated 10.05.2024. The relevant para reads as under:- 5. The iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person . There is no dispute that the complex constructed by both the assessees in these appeals are covered by the definition of residential complex as given in Section 65(91a). There is also no dispute that both the assessees had engaged contractors for construction of the complexes. The dispute in these appeals is as to whether the assessees would be liable to pay Service Tax on the amounts charged by them from their customers with whom they had entered into agreements for construction of the residential units and whose possession was to be handed over on completion of the construction and full payment having been made by the customers. It is seen that on this point, the Tax Research Unit of the Central Board of Excise Customs, which is a wing of the C.B.E. C. dealing with legislation work, had vide Circular No. 332/35/2006-TRU, dated 1-82006 clarified that in case where a builder, promoter, developer builds a residential complex having more than 12 residential units by engaging a contractor for constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenged on several grounds. The Bombay High Court, also considered the issue whether the explanation was prospective or retrospective in operation and ruled that the explanation inserted by the Finance Act, 2010 brings within the fold of taxable service a construction service provided by the builder to a buyer where there is an intended sale between the parties whether before, during or after construction; that the Explanation was specifically legislated upon to expand the concept of taxable service; that prior to the explanation, the view taken was that since a mere agreement to sell does not create any interest in the property and the title to the property continues to remain with the builder, no service was provided to the buyer; that the service, if any, would be in the nature of a service rendered by the builder to himself; that the explanation expands the scope of the taxable service, provided by builders to buyers pursuant to an intended sale of immovable property before, during or after the construction and therefore the provision is expansive of the existing intent and not clarificatory of the same; and is consequently prospective . The above decision was applied by the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 1.7.2010. The appellant does not contest this. 8. In view of the foregoing, we set aside the demand of service tax, interest and penalties for the period upto 1.7.2010. The impugned order is set aside in above terms. Appeal is allowed with consequential relief, if any. 12. The decision in the case of Real Value Promoters was applied by the Tribunal in the case of Jain Housing Construction Limited versus the Commissioner of Service Tax, Chennai (2023) 10, Centax 170, (Tribunal-Madras) whereby the demand raised under Construction of Residential Complex services for the period prior to 01.07.2012 was set aside. Though the department filed appeal against the said order before the Hon ble Apex Court, the decision of the Tribunal was sustained by Hon ble Apex Court by dismissing the department appeal as reported in (2023) 10, Centax 170, (Tribunal-Madras). After appreciating the facts, and following the above decisions we hold that the demand raised under CICS for the disputed period cannot sustain and requires to be set aside. Ordered accordingly. 13. The department has filed appeal against the order passed by the adjudicating authority for not imposing the penalty under Section 78. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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