2024 (10) TMI 1401 - AT - Service Tax

Tribunal Overturns Service Tax Demands on Pre-2010 Residential Construction, Aligns with Prior Rulings and Precedents.

The tribunal ruled in favor of the appellant, setting aside the impugned order that confirmed service tax demands under CRCS for the period from January ... Failure to pay the service tax on the full amount of consideration received - services of construction of complex service - disputed period is from 01/2008 to 08/2010 - HELD THAT:- Attention invited to an order of this bench in the case of M/s. Shanti builders wherein this bench vide Final Order No. 40257/2023 dated 06.04.2023 [2023 (4) TMI 350 - CESTAT CHENNAI] has held that no service tax could be levied under construction of residential complex services prior to 01.07.2010. The confirmation of the demand of Service Tax cannot sustain, nor could there be any scope to impose penalties under Sections 77 & 78 of the Financial Act, 1994. Therefore, the impugned order which has upheld the demands deserves to be set aside - appeal allowed. Issues:Whether the revenue correctly imposed service tax liability on the appellant under construction of residential complex services (CRCS) for the period from 01/2008 to 08/2010.Analysis:The judgment involves a dispute regarding the imposition of service tax on the appellant under the category of construction of residential complex services (CRCS) for the period from January 2008 to June 2010. The revenue issued a Show Cause Notice proposing to recover service tax, interest, and penalties for the aforementioned period. The original authority confirmed the demands in an Order in Original dated 29.11.2013. The appellant then approached the first appellate authority, but the appeal was dismissed, leading to the present appeal before the forum.Upon hearing both sides, the main issue before the tribunal was whether the revenue was justified in imposing the service tax liability on the appellant under CRCS. The appellant's counsel argued that based on previous decisions, service tax could only be levied after 01.07.2010 for construction of residential complexes. The counsel referred to various CESTAT orders and the ruling of the Hon'ble Apex Court to support this argument.The tribunal considered the arguments and rulings cited by the appellant's counsel, which established that no service tax could be imposed on construction of residential complexes prior to 01.07.2010, whether as service simpliciter or a works contract. Since the disputed period in this case was from 16.06.2005 to March 2010, the tribunal applied the aforementioned ruling and concluded that the demands for service tax could not be upheld. Consequently, the tribunal set aside the impugned order confirming the demands and ruled in favor of the appellant.In conclusion, the tribunal allowed the appeal, providing consequential benefits as per the law. The judgment clarified the legal position regarding the imposition of service tax on construction of residential complexes and emphasized the applicability of the ruling that precluded such taxation before 01.07.2010, regardless of the nature of the service provided.This detailed analysis highlights the legal arguments, precedents, and the tribunal's decision regarding the imposition of service tax under CRCS, offering a comprehensive understanding of the judgment.