The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and observed that mere registration under particular category and filing service tax returns would not mean providing service.
SPL Developers Pvt. Ltd, the appellant filed this appeal to assail the order passed by the Commissioner of Service Tax, Bangalore confirming the demand of service tax by taking recourse to the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act 1994.
The show cause notice mentions that though the appellant was engaged in the activity of construction of residential apartments classified under the taxable category of „construction of a new residential complex‟, as defined under section 65(30a)(a) of the Finance Act and made taxable under section 65(105)(zzzh) of the Finance Act, but the appellant did not discharge the service tax liability under this category.
The appellant filed a reply to the show cause notice contending that the services rendered by the appellant would not be classifiable under „construction of a new residential complex‟ as defined under section 65(30a)(a) of the Finance Act and in any case the service would fall under works contract service, which become taxable w.e.f. 01.06.2007 and the appellant had discharged service tax liability under this category.
Quashing the service tax demand the Bench comprising Justice Dilip Gupta, President and CJ Mathew, Technical Member noted that “Mere registration under a particular category and filing service tax returns under the said category would not mean that the appellant has provided service under that category, for in each case it has to be actually ascertained, if a dispute is raised, under which particular category the service would fall.”
“If the service actually falls under works contract service, then mere registration under a different category and payment of service tax under that category would not be sufficient to hold that the service was actually rendered under that category” the Tribunal observed
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