2023 (12) TMI 850 - AT - Service Tax

Service Tax on Construction Services Not Applicable Before June 2007, Tribunal Grants Relief for 2005-2006 Period.

M/s. Gold Infrastructure Versus Commissioner of Central Tax, Bangalore

The Tribunal allowed the appeal, ruling that service tax on 'Construction of Complexes' and 'Construction of Industrial and Commercial Complexes' was not ... Levy of service tax - work contract service for construction of residential apartments and service apartments - Construction of Complex Service and Commercial and Industrial Complex Service or not - period June, 2005 to March, 2006 - HELD THAT:- As per the clauses of the agreement and subsequent RA bills show that the activity carried out by the appellant is a composite contract. As per the law laid down by the Hon’ble Apex Court in the case of Commissioner of Central Excise & Customs Kerala Vs. Larsen & Toubro Ltd [2015 (8) TMI 749 - SUPREME COURT], the activities carried out by the appellant, which fall under the category of works contract are subject to levy of service tax only after 01.06.2007. Further, the Learned AR submits that at the relevant time the service rendered by the appellant was subject to service tax and considering the law laid down by Apex Court in the matter of M/s Larsen & Toubro Ltd Vs. Commissioner of Service Tax, Kolkata [2019 (12) TMI 69 - CALCUTTA HIGH COURT] service tax is not applicable in appellant case. Appeal allowed. Issues involved:The issue in the present appeal is whether the activity of 'Construction of Complexes' and 'Construction of Industrial and Commercial Complexes' prior to 01.06.2007 is leviable to Service Tax.Details of the judgment:Issue 1: Leviability of Service Tax on works contract services provided prior to 01.06.2007The appellant provided services of 'Construction of Complex Service' and 'Commercial and Industrial Complex Service' between June 2005 to March 2006. The appellant contended that the services provided by them are not liable to service tax. However, the adjudication authority confirmed the demand of service tax. The appellant appealed the order before the Commissioner (Appeals), who rejected the appeal. The appellant further argued that the levy of service tax on works contract fails prior to 01.06.2007, as there was no charging section for works contracts before that date. The appellant relied on the Supreme Court's decision in Commissioner of Central Excise & Customs, Kerala Vs. Larsen & Toubro Ltd, which held that the levy of service tax on works contract prior to 01.06.2007 was not valid due to the absence of a specific charging section.Issue 2: Applicability of service tax on works contract servicesThe appellant cited the case of Total Environment Building Systems Pvt Ltd Vs. Deputy Commissioner of Commercial Taxes, where it was held that the tax on the service component of works contract became leviable from 01.06.2007 onwards. The appellant referred to various judgments and rulings, including C.S.T Bangalore Vs. Turbotech Precision Engineering Pvt Ltd, Commr. Of C.Ex & S.T Panchkula Vs. Satish Kumar Contractor Ltd, Delhi Jai Board Contractors Welfare Association Vs. Union of India, Larsen & Toubro Ltd., Vs. Commissioner of Service Tax, Kolkata, and Ircon International Ltd., Vs. Commissioner of Service Tax, Delhi, which all supported the view that service tax was not leviable on works contract services provided before 01.06.2007.Final Decision:After considering the arguments and legal precedents, the Tribunal allowed the appeal, stating that the activities carried out by the appellant, falling under the category of works contract, are subject to levy of service tax only after 01.06.2007. The Tribunal relied on the law laid down by the Hon'ble Apex Court and granted consequential relief, if any, as per law.This summary provides a detailed overview of the judgment, focusing on the issues involved and the Tribunal's decision based on legal interpretations and precedents cited during the proceedings.