Tribunal sets aside service tax demand for construction activities, ruling no tax due pre-2010, verifying payments post-2010.

The Tribunal allowed the appeal, setting aside the service tax demand for specified periods based on the classification of the construction activity. The activity of constructing residential units on the appellant's own land was not classified as works contract service. No service tax was payable before 01/07/2010, and for the period after, verification of service tax payment under construction of complex service was directed. The demand for service tax was set aside for certain periods, pending verification of payment claims, and the time bar issue was not addressed due to the appeal's success.

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Issues:
1. Classification of construction activity as works contract service or construction of complex service
2. Liability for service tax prior to and after 01/07/2010
3. Time bar for raising demand

Analysis:
1. The appellant engaged in construction of residential units on its own land, transferring them to buyers after completion. The dispute was over classification under works contract service or construction of complex service. The Adjudicating Authority classified it as works contract service, involving supply of material and labor. However, the Tribunal found that the activity did not merit classification under works contract services as the construction was on the appellant's own land, not under a contract for construction on someone else's land.

2. The appellant argued that prior to 01/07/2010, no service tax was payable as per CBEC Circulars. The Tribunal agreed, citing precedents and clarifications that no service tax was due for such activities before the legal fiction deeming them as services was introduced. For the period after 01/07/2010, the Tribunal directed the Adjudicating Authority to verify if the appellant had paid the service tax under construction of complex service after availing abatements.

3. The appellant contended that the demand raised was time-barred. However, since the appeal was allowed on merit, the Tribunal did not delve into the time bar issue. The demand for service tax was set aside for the period up to 30/06/2010, and for the period from 01/07/2010 to March 2011, the demand under works contract service was also set aside pending verification of the appellant's claim of payment under construction of complex service.

Therefore, the Tribunal allowed the appeal, setting aside the service tax demand for the specified periods based on the classification of the construction activity and the applicable legal provisions.

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