Tribunal grants appeal on service tax, interest, and penalty for builders constructing residential complexes pre-01-07-2010

The Tribunal allowed the appeal, setting aside the order rejecting the appellant's appeal on service tax, interest, and penalty. The Tribunal held that builders were not liable to pay service tax for constructing residential complexes before 01-07-2010, as established by previous decisions and CBEC circulars. The penalties imposed were dismissed, and consequential relief was granted to the appellant.

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Issues:
The appeal against the order passed by the Commissioner (Appeals) rejecting the appellant's appeal regarding the demand for service tax, interest, and penalty.

Summary:
The appellant was involved in developing a Residential Complex and was registered under the category of "Construction of Complex Services" but failed to submit returns or pay service tax liability. A show cause notice was issued for recovery of Service Tax. The original authority confirmed the demand but did not impose a penalty. The appellant appealed, which was rejected by the Ld. Commissioner (Appeals), leading to the present appeal.

The appellant argued that the impugned order did not consider relevant facts, laws, and circulars issued by CBEC. Referring to various circulars and decisions, the appellant contended that the activity of construction of residential complexes by builders/developers was taxable only from 01-07-2010. The Tribunal had consistently held that builders were not liable to pay service tax for construction services before this date.

After considering submissions, the Tribunal found that the issue had been settled in various decisions and clarified by CBEC circulars. The Tribunal cited precedents where it was held that service tax was not chargeable on construction of residential complexes before 01-07-2010. Consequently, the impugned order was set aside, the appeal was allowed, and the penalties imposed were dismissed.

In conclusion, the Tribunal found the impugned order unsustainable in law and allowed the appeal of the appellant, providing consequential relief as per law. The decision was based on the settled issue that builders/developers were not liable to pay service tax for the construction of residential complexes before 01-07-2010, as established by previous Tribunal decisions and CBEC circulars.

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