TaxTMI 
TaxTMI 
2024 (1) TMI 680
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.... 2006-07 to 2009-10 12,62,922/- ST/56040/2013 13.12.2012 2005-06 to 2009-10 14,92,722/- For the sake of convenience, we will take up the facts of appeal no. ST/673/2012 wherein the Commissioner has confirmed the demand of service tax amounting to Rs. 56,89,867/- under proviso to Sub-section(1) of Section 73 of Finance Act against the appellant along with interest and equal penalty under Section 78. Ld. Commissioner has also imposed penalty of Rs. 5,000/- under Section 77 of the Act and also imposed penalty under Section 76 of the Act. 2. Briefly the facts of the present case are that the appellant are engaged in the construction of Residential/Commercial Complexes on contract basis in respect of government departments/Civic authorities and private agencies. The Construction services and construction of residential complex services were brought under the service tax net w.e.f. 10.09.2004 and 16.06.2005 respectively. It appears that the appellant contravened the provisions of Section 67,68,69 and 70 of the Finance Act, 1994 read with Rule 4,6 &7 of the Service Tax Rules, 1994 by not paying the service tax at the prescribed rate and by not furnishing the peri....
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....further submitted that this issue is no more res integra and has been settled by various decisions of the Tribunal wherein the Tribunal after relying upon the decisions of the Hon'ble Apex Court in the case of Commissioner of C.Ex & Cus. Kerala Vs. Larsen & Toubro Ltd. reported in 2015 (39) S.T.R. 913 (S.C.). He further submitted that even after 01.06.2007 service tax cannot be demanded under the category of residential/complex service and this issue has also been settled by the various decisions of this Tribunal. In support of his submissions, he relied upon the following decisions: • M/s Srishti Consturction Vs. Commissioenr of Central Excise and ST, Ludhiana reported in 2017 (12) TMI 172-CESTAT, Chandigarh. • Real Value Promotors Pvt Ltd Vs. Commissioner of GST and Central Excise, Chennai reported in 2018-TIOL-2867-CESTAt-MAD. • India Guniting Corporation Vs. Commissioner of Central Tax, New Delhi reported in 2021 (52) G.S.T.L. 174 (Tri.-Del.). • Ashwini Apartments Vs. Commissioner of GST & C.Ex. Chennai South reported in 2019 (31) G.S.T.L. 476 (Tri.-Chennai). • SMS Gardens Pvt. Ltd. Vs. Commissioner of GST& Centra....
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.... approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person. the purposes of this clause, Explanation. For the removal of doubts, it is hereby declared that for (a) "personal use" includes permitting the complex for use as residence by another person on rent or without consideration; (b) "residential unit means a single house or a single apartment intended for use as a place of residence;" 7.4 The taxable service of works contract was introduced with effect from 1.6.2007 by insertion of section 65(105)(zzzza), The Explanation to the said provision also contained the definition of "works contract" Section 65(105)(zzzza) read as under:- "To any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. Explanation. For the purposes of this sub-clause, "works contract mea....
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.... Excise Vs. Larsen & Toubro Ltd. reported in 2015 (39) STR 390 (SC) = 2015-TIOL-187-SC-ST. The Hon'ble Apex Court held that the taxable services of 'consulting engineer under section 65(105)(g) of the Finance Act; erection, 'commission and installation services' under section 65(105)(zzd) of the said Act; 'technical testing and analysis' under section 65(105)(zzh) ibid, 'construction services' under section 65(105)(zzq); construction of complex services under section 65(105)(zzzh) would refer only to service contracts simpliciter and not to composite works contracts; that these five taxable services only would qualify without any other element. The Hon'ble Supreme Court also observed that with Introduction of works contract service as a separate taxable service, statutory mechanism to exclude the value of transfer of property of goods has been prescribed. The Apex Court held that since the Finance Act had not laid down any charge or machinery to levy and assess service tax on indivisible works contract prior to 1.6.2007, the levy on such composite works contract prior to that date has no constitutional validity. 7.6 The Larsen & Toubro (....
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....y fall within the ambit of works contract service as defined under Section 65(105) (zzzza) ibid. It is possibly with this intent in mind that the lawmaker have included in the definition of works contract, erection and commissioning service, Commercial or industrial construction service, construction of complex service and in addition turnkey project including EPC projects within the definition of works contract service. 7.9 At this juncture, it is worthwhile to reproduce excerpts from the Union Finance Minister's budget speech in 2007- "State Governments levy a tax on the transfer of property in goods involved in the execution of a works contract. The value of services in a works contract should attract service tax. Hence, I propose to an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the words contract". 7.10 The issue was analyzed by the Hon'ble Apex Court in Larsen & Toubro case (supra) and held that there can be no levy of service tax on composite contracts (involving both service and supply of goods) prior to 1.6.2007. This read together with the budget speech as above would lead t....
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....es, we find that the issue falls for consideration is whether the services rendered by the appellant in respect of 52 contracts entered with various Govt. authorities need to be taxed under MMRC/CICS/ECIS or otherwise. It is on record and undisputed that the adjudicating authority has specifically held that all the 52 contracts which has been executed by the appellants are with material. Learned Counsel was correct in brining to our notice that the said findings of the adjudicating authority that the appellant is eligible for abatement of 67% of the value of the goods is in itself the acceptance of the fact that the contracts were executed with material. It is also on record that the Revenue has not contested these findings of the adjudicating authority before the Tribunal. If that be so, even when the Revenue authorities are accepting the facts that the contracts executed by the appellant are nothing but works contracts, for the period in question, entire case of the Revenue in the show-cause notice stands demolished by the Apex Court in the case of Larsen & Toubro Ltd. (supra). In the said judgment, their Lordships have very categorically laid down the law that the works contract....
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....jected by the adjudicating authority. Therefore, even as the services rendered by them are taxable for the period from 1st June, 2007 to 30th September, 2008 the narrow confines of the show cause notices do not permit confirmation of demand of tax on any service other than 'commercial or industrial construction service'. It is already established in the aforesaid judgment of the Hon'ble Supreme Court that the entry under Section 65(105)(zzd) is liable to be invoked only for construction simpliciter. Therefore, there is no scope for vivisection to isolate the service component of the contract." d. In the case of Logos Construction Pvt. Ltd. Vs. Commissioner of Central Excise as reported in 2018 (6) TMI 1361 = 2018-TIOL-2716-CESTAT-MAD, the Tribunal has held as under:- "5.1 The payment upto 01.06.2007 will get extinguished on account of the law that has been laid down by the Apex Court in the case of Larsen & Toubro Ltd., (supra), relied upon by the Ld. Counsel. So ordered. 5.2 The Ld. Counsel has been at pains to point out that on-going projects which were only in the nature of works contract prior to 01.04.2007 cannot be brought under differen....
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....mpliciter. c. For activities of construction of new building or civil structure or new residential complex c etc. involving indivisible composite contract, such services will require to be exigible to service tax liabilities under 'Works Contract Service' as defined under section 65(105)(zzzza) ibid. d. The show cause notices in all these cases prior to 1.6.2007 and subsequent to that date for the periods in dispute, proposing service tax liability on the impugned services involving composite works contract, under 'Commercial or Industrial Construction Service' or Construction of Complex Service, cannot therefore sustain. In respect of any contract which is a composite contract, service tax cannot be demanded under CICS/CCS for the periods also after 1.6.2007 for the periods in dispute in these appeals. For this very reason, the proceedings in all these appeals cannot sustain. 9. The next issue that arises for consideration is with regard to the demand raised for the reason that appellants did not intimate the department about their intention to opt for payment of service tax under composition scheme under Works Contract Service. The Tribu....