Appeals allowed, demand for service tax set aside under Finance Act. Legal precedents matter.

The Tribunal allowed the appeals, setting aside the demand for service tax under section 65(105) (zzzh) of the Finance Act, 1994 and explanation to Section 65 (105) (zzzu). The decision was based on the reliance on a previous High Court judgment as the Apex Court had not set it aside. This case emphasizes the importance of legal precedents and the impact of higher court decisions on lower court rulings, highlighting the need to adhere to established legal principles until overturned by a superior court.

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Issues:
1. Appeal against confirmation of demand under section 65(105) (zzzh) of the Finance Act, 1994 and explanation to Section 65 (105) (zzzu).
2. Whether the decision of the Hon'ble High Court in a related case can be relied upon when the Revenue has filed an appeal before the Hon'ble Apex Court.

Issue 1:
The appellants appealed against the confirmation of demand under section 65(105) (zzzh) of the Finance Act, 1994, and explanation to Section 65 (105) (zzzu) for the Finance Act. The case involved the construction of residential complexes and the imposition of service tax on 25% of the value of the flat. Show cause notices were issued, and the demand of service tax was confirmed along with interest and penalties. The appellants argued that based on previous judgments from the Hon'ble Delhi High Court, they were not liable to pay service tax. However, the Authorized Representative contended that a retrospective amendment in the Finance Act, 2017 confirmed the levy of service tax and the mechanism of recovery. After hearing both parties, the Tribunal considered the submissions.

Issue 2:
The main issue that arose was whether the decision of the Hon'ble High Court in a similar case could be relied upon when the Revenue had appealed before the Hon'ble Apex Court. The Tribunal referred to a case where it was held that if the order of the High Court had not been set aside by the Apex Court, the High Court's decision should be followed. Since there was no stay granted or the order set aside by the Apex Court in the case being relied upon, the Tribunal held that service tax was not payable by the appellants. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential relief.

This judgment highlights the significance of legal precedents and the impact of appellate court decisions on lower court rulings. It underscores the importance of analyzing the legal implications of previous judgments and the necessity of following established legal principles until overruled by a higher court.

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