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TMI Blog2020 (3) TMI 1481X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 1994) or otherwise was examined by the Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] - The Hon ble Apex Court has decided that service contracts are a separate specie of contracts known to the trade and they cannot be equated with contracts for service simpliciter. Therefore such contracts can be charged to service tax only with effect from 01.07.2007 and as works contract service (when works contracts were brought under charging Section 66). As far as service tax under construction of complex services is concerned, prior to 01.07.2010 (when the explanation was inserted), no tax could be levied. This was also clarified by the CBEC in Circular No. 108/2/2009/ST dated 29.01.2009. The question before the Tribunal Principal Bench in the case of M/S KRISHNA HOMES VERSUS CCE, BHOPAL AND CCE, BHOPAL VERSUS M/S RAJ HOMES [ 2014 (3) TMI 694 - CESTAT AHMEDABAD] was whether this limitation on taxation prior to 01.07.2010 also extends to cases where such services were rendered not as construction of complex services but as works contract services and it was answered in affirmative. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 31.12.2010 along with interest. It was also proposed to impose penalties upon the appellant under Section 78 of the Finance Act 1994 and also under Section 77(2) of Finance Act 1994. After following due process, the learned adjudicating authority passed the impugned order confirming the demands along with interest and imposing penalties as proposed in the show-cause notice. Aggrieved, the appellant challenged the demand on the following grounds: (i) prior to 01.07.2010 no service tax could be levied on activities of the appellant, (ii) Construction services provided for personal use are excluded from the definition of construction of residential complex service (iii) There were some amounts such as those collected towards corpus fund, electricity charges, stamp duty, registration charges and VAT which have been included in the taxable amount in the show-cause notice, which is unsustainable. (iv) Extended period of limitation is not invokable. (v) Interest and penalties are not imposable. 2. Learned A.R. supports the impugned order. We have considered the arguments on both sides and perused the records. Before proceeding to decide the demands on merit, it would be useful to review ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Union to tax works contracts per se was never in doubt. 5. The question as to whether taxation of works contracts is covered by the charging section of the service tax provisions (Finance Act 1994) or otherwise was examined by the Hon ble Supreme Court in the case of Commissioner of Central Excise Customs Vs Larsen Toubro Ltd [2015(39)STR 913(SC)]. Section 66 66A of this Act are the charging sections. Section 66 charges service tax on taxable services referred to in various sub-clauses of clause 105 of Section 65. Section 66A dealt with charging the service recipient under reverse charge mechanism in certain cases. The question before the Hon ble Apex Court in the case of Larsen Toubro Ltd (supra) was whether the service tax could be levied on contracts which involve both supply of goods and rendering of services. Initially, service tax was levied under various sub-clauses of clause 65 (105) of the Finance Act 1994. Wherever such services also involved use of some material, exemption notifications were issued giving abatement towards cost of the material involved on actual or presumptive basis. Later, with effect from 01.07.2007 a separate entry called works contract service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) as follows: residential complex means any complex comprising of (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed 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. Explanation. For the removal of doubts, it is hereby declared that for the purposes of this clause, (a) personal use includes permitting the complex for use as residence by another person on rent or without consideration; (b) residential unit means a single house or a single apartment intended for use as a place of residence. For a charge to sustain under Works Contract Service, the nature of service must be one of construction of residential complex service. The charge for construction of complex service as service sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice is rendered prior to issue of completion certificate and transfer to the buyer, it is not taxable the service being in the nature of self service. (iv) Further, whenever the service is rendered for completion or construction of a flat for personal use of the service recipient, no Service Tax is payable in view of the exclusion in the definition of residential complex service. (v) After 1-7-2010, Service Tax is chargeable under the head of construction of complex services if it is service simpliciter and under works contract service if it is a composite works contract unless it is for personal use of the service recipient. 8. The decision of the Principal bench of the Tribunal in the case of Krishna Homes (supra) was followed by various other benches including this Bench in several cases. We find no reason to take a different view in this case. Accordingly, we hold that no service tax could be charged from the appellant in respect of the services rendered by them as works contract services for the period 01.06.2007 to 01.07.2010. 9. This leaves us with the period from 01.07.2010 to 31.12.2010. 10. The undisputed fact is that appellant had entered into two contracts one for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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