Construction activities ruled as works contract services, exempt from service tax pre-1.6.2007. Remand ordered post-1.6.2007 services.

The Tribunal found in favor of the appellant, ruling that their construction activities qualified as works contract services and were exempt from service tax prior to 1.6.2007. The Tribunal referenced a previous judgment to support this decision. For the period after 1.6.2007, the Tribunal directed a remand to ascertain the nature of services provided post that date. The demand for service tax before 1.6.2007 was set aside, and the case was remanded for further investigation regarding the post-1.6.2007 period.

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Issues:
1. Whether the appellant's construction activities are subject to service tax under Commercial or Industrial Construction Services (CICS) and Construction of Residential Complex Services.
2. Whether the appellant's contracts are composite contracts exempt from service tax prior to 1.6.2007.
3. Whether the demand of service tax for the period before and after 1.6.2007 is sustainable based on the nature of construction activities undertaken.

Analysis:
1. The appellants, engaged in works contract services, constructed various projects including a shopping mall, residential quarters, and houses for Tsunami affected areas. The department alleged non-payment of service tax under CICS and demanded service tax with interest. The appellant argued that pre-1.6.2007 period is exempt from service tax as per Larsen & Toubro Ltd case. They contended that their activities fall under works contract services and not CICS or Construction of Residential Complex Services, citing Tribunal precedents. The department argued that the activities constitute commercial or industrial construction and construction of residential complexes, emphasizing the non-composite nature of the contracts.

2. The appellant relied on Larsen & Toubro Ltd case to support their claim of exemption from service tax pre-1.6.2007 due to the composite nature of their contracts. They highlighted that post-1.6.2007, they are registered under works contract services. The department countered, stating the contracts are not composite and fall under construction of complex services and CICS. They pointed out specific projects like residential quarters for medical college staff and Tsunami affected areas as examples of taxable activities.

3. The Tribunal observed that the appellant's projects were undertaken on a turnkey basis, constituting works contract services. Statements from company officials confirmed completion of projects before 1.6.2007. The Tribunal referenced Larsen & Toubro judgment to set aside the demand for the period pre-1.6.2007. For the post-1.6.2007 period, it directed a remand to verify if amounts received after 1.6.2007 were for services completed before that date, citing relevant Tribunal decisions. The impugned order was modified to exclude pre-1.6.2007 demand and remanded for further verification on post-1.6.2007 demand.

This detailed analysis covers the issues raised in the judgment comprehensively, addressing the arguments presented by both the appellant and the department, along with the Tribunal's findings and directions.

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