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of <h1>Tribunal rules in favor of appellants on service tax dispute, citing legal precedents</h1> The Tribunal ruled in favor of the appellants, finding the demand for service tax, interest, and penalty unsustainable based on legal precedents and ... Works Contract - levy of Service Tax - construction of residential complex - Held that:- The period involved in the case is from June 2005 to April 2006 - That the issue being a works contract whether subject to service tax prior to 1.6.2007 has been settled by the judgment of the Hon’ble Supreme Court in the case of Commissioner Vs. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT], where it was held that Works contract were not chargeable to service tax prior to 1.6.2007 - demand set aside - appeal allowed - decided in favor of appellant. Issues:1. Service tax liability on construction of residential complex.2. Validity of demand for service tax, interest, and penalty.3. Interpretation of works contract subject to service tax.Analysis:The case involved appellants engaged in constructing residential complexes registered with the Service Tax Department. The issue arose when it was discovered that the appellants were not fulfilling their service tax liability, leading to a show cause notice demanding service tax, interest, and penalty. The original authority confirmed the demands for specific projects but dropped others, imposing a penalty under Section 78 of the Finance Act, 1994. Upon appeal, the Commissioner (Appeals) upheld the demands but directed a reevaluation of the demand only for the value of taxable services realized from the sale of the appellants' share of apartments, including the entire construction cost.During the proceedings, it was noted that the period in question was from June 2005 to April 2006. The central issue revolved around whether works contracts were subject to service tax before 1.6.2007. This matter had been settled by the Hon'ble Supreme Court in the case of Commissioner Vs. Larsen & Toubro Ltd. The Tribunal also referenced a similar case involving CCL Products (India) Ltd. where the demand was set aside based on the Supreme Court's judgment. In alignment with these precedents, the Tribunal concluded that the demand in the current case was unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed with any necessary consequential relief.In summary, the Tribunal ruled in favor of the appellants, holding that the demand for service tax, interest, and penalty was unsustainable based on legal precedents and judgments from higher courts. The decision highlighted the settled interpretation of works contracts regarding service tax liability before a specific date, ultimately leading to the allowance of the appeal and relief for the appellants.
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