Composite construction contracts outside construction of complex service; demand failed because the notice could not be reclassified under another service.

Composite construction contracts involving transfer of property in goods were treated as outside construction of complex service and similar pure service categories, following the appellant's earlier case and the settled position on such contracts. The demand was also unsustainable because the adjudicating authority could not support a notice issued for one taxable service by reclassifying the activity under another service category. On that basis, the service tax demand, interest and penalties were set aside, and relief followed in favour of the assessee.

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Issues: Whether the appellant's composite construction activity for the period January 2009 to March 2010 was exigible to service tax under construction of complex service, and whether the demand of tax, interest and penalties could be sustained.

Analysis: The dispute was held to be covered by the earlier decision in the appellant's own case and by the settled position that composite construction contracts involving transfer of property in goods do not fall within commercial or industrial construction service or construction of complex service as pure service categories. It was also noticed that once the show cause notice proposed demand under those categories, the demand could not be sustained by reclassifying the activity under a different taxable service. The cited circulars and later decisions were treated as consistent with that position.

Conclusion: The demand under construction of complex service, together with the related interest and penalties, was held unsustainable and was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned orders were nullified, with consequential relief as admissible in law.

Ratio Decidendi: Composite construction contracts involving transfer of property in goods are not taxable under construction of complex service or similar pure service categories, and the adjudicating authority cannot sustain the demand by travelling beyond the taxable service alleged in the show cause notice.

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