Tribunal Rules Service Tax Not Applicable to Developers Before 2010; Appeal Allowed with Consequential Benefits.

The Tribunal set aside the impugned order demanding service tax from the appellant for the period April 2008 to March 2009, concluding that service tax was not applicable to developers before 1.7.2010. This decision was based on consistent precedents from CESTAT benches and the Supreme Court ruling in CCE & CC Kerala Vs Larsen & Toubro Ltd. The appeal was allowed, granting the appellant any consequential benefits as per law.

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Issues:
Levy of service tax on the developer prior to 1.7.2010.

Analysis:
The appellant, engaged in construction services, challenged the demand of service tax for the period April 2008 to March 2009. The issue was whether service tax could be levied on the developer prior to 1.7.2010. The appellant argued that the levy of service tax on developers before 1.7.2010 had been set aside in various CESTAT benches, following the decision in CCE & CC Kerala Vs Larsen & Toubro Ltd. The Assistant Commissioner supported the lower authorities' findings.

The Tribunal considered the arguments and judicial precedents. It noted that several CESTAT benches consistently held that service tax was not applicable to developers before 1.7.2010, following the Supreme Court decision in CCE & CC Kerala Vs Larsen & Toubro Ltd. The Tribunal referred to a recent order in M/s. Casa Grande Private Ltd. Vs CST Chennai, emphasizing that no service tax could be levied on construction of residential complexes before 1.7.2010, whether as a service or a works contract.

Based on the precedents and legal position, the Tribunal concluded that there was no justification for levying service tax on the appellant for the period before 1.7.2010. Therefore, the impugned order upholding the service tax demand was set aside, and the appeal was allowed with any consequential benefits as per law.

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