Pre-amendment construction of complex service held outside service tax, invalidating demand and related penalties.

Construction of complex service for the period before 01.07.2010 was held not liable to service tax in light of the Board circulars and the later explanation inserted into section 65(105)(zzzh) of the Finance Act, 1994. As the demand itself was unsustainable for the relevant period, the confirmation of interest and penalties could not survive. The demand was therefore set aside, and the assessee succeeded on the taxability issue for the pre-amendment period.

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Issues: Whether the services classified as construction of complex service were exigible to service tax for the period prior to 01.07.2010, and whether the confirmation of demand, interest and penalties was sustainable.

Analysis: The period in dispute fell before 01.07.2010. The liability was examined in the light of the Board circulars and the amendment to section 65(105)(zzzh) of the Finance Act, 1994 by insertion of the explanation from 01.07.2010. On that basis, construction of complex service for the relevant period was held not liable to service tax. Since the demand itself was unsustainable for the relevant period, the associated interest and penalties could not survive.

Conclusion: The demand of service tax for the period prior to 01.07.2010 was unsustainable, and the confirmation of interest and penalties was set aside in favour of the assessee.

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