The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable on the construction of residential complexes for the period before 1.07.2010 and set aside.
M/s. Casa Grande Private Limited, the assessee challenged the Order-in-Original passed by the Commissioner of Central Excise, Chennai. The appellant is engaged in the business of construction of a residential complex, is a developer and appellant enters into a contract with prospective buyers for the sale of an undivided share in the land, together with the construction of a residential unit for such buyers which amount to composite contracts.
The period of dispute is from December 2009 to September 2010. The Revenue viewed that the activities undertaken by the assessee were taxable under works contract service and that the assessee had informed that they had not paid Service Tax from January 2009 onwards.
In light of various orders, it has been categorically held that no Service Tax could be levied on the construction of residential complexes before 01.07.2010 even when the service is rendered either as service simpliciter or as a works contract.
It was evident that the period of dispute is up to September 2010 and the liability to Service Tax, if any, is restricted to the period post 01.07.2010.
The two-member bench comprising P. Dinesha (Judicial) and Vasa Seshagiri Rao (Technical) upheld the demand for the period post 01.07.2010 and set aside the demand for the period before this date. The CESTAT further remanded the matter to the Adjudicating Authority for the limited purpose of calculating the Service Tax liability and interest. The appeal of the assessee was partly allowed and partly remanded.
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