In a recent judgement, the Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not demand able on the construction of residential complexes in the period before 01.07.2010.
M/s. Shanti Builders, the assessee preferred the present appeal against the Order-in-Original No. 14/2013 dated 21.06.2013 passed by the Commissioner of Central Excise, Chennai in the period of dispute from 16.06.2005 to March 2010.
The Revenue had entertained a doubt that the appellant, who was a builder, had undertaken construction of various residential projects and rendered the construction of complex services (CCS) and therefore, they were liable to pay Service Tax. Consequently, issued a Show Cause Notice dated 12.04.2011, proposing to demand Service Tax under CCS from 16.06.2005. In the Show Cause Notice, the Commissioner had acknowledged the payment of Rs.40,00,000/- paid by the assessee and hence, inter alia proposed appropriation of the same against the proposed demand.
The appellant filed a reply denying the Service Tax liability on the ground that what they undertook was like a ‘works contract service’. The Commissioner had confirmed the proposals made in the Show Cause Notice.
In the case of Commissioner of Central Excise & Customs, Kerala v. M/s. Larsen & Toubro Ltd, it was held that Service Tax would be chargeable only after 01.07.2010 under the head CCS if service simpliciter is involved and under the head WCS if it is a composite works contract.
A Coram comprising of P. Dinesha, Member (Judicial) and Vasa Seshagiri Rao, Member (Technical) observed that it has been categorically held that no Service Tax could be levied on construction of residential complexes before 01.07.2010 even when the service is rendered either as service simpliciter or as a works contract.
Since the period of the dispute of the present case was from 16.06.2005 to March 2010, the above-said ruling applies to the present case. The Tribunal set aside the demand raised in the impugned order and allowed the appeal.
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