TaxTMI 
TaxTMI 
2025 (7) TMI 565
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....ing an equivalent penalty under section 78 of the Finance Act, 1994. 2. Briefly stated, the facts are that the appellant is engaged in providing construction of residential complex service and is registered as a service tax assessee. During audit, it was noticed that the appellant undertook construction of a residential complex, namely, "Flamingo", (59 dwelling units) at Pallikkaranai, village and "Rainbow's End" (60 dwelling units) at Selaiyur village. The appellant was paying service tax upto January 2009 but did not pay service tax from February 2009. The reason stated by the appellant for non payment of service tax was that consequent to Board's Circular No.108/2/2009-ST dated 28.01.2009 none of their clients were paying service tax and hence they have also not paid the service tax. 3. The department was of the view that the exclusion contained in the circular is available only if a residential complex is constructed by a person for his personal use and the exclusion is not available for construction of residential unit which is a part of a residential complex and thus not available to the appellant. Hence a show cause notice No.32/2012 dated 01-03-2012 was issued to the ....
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....os. 42436 to 42438/2018 dated 18.09.2018 in the case of Real Value Promoters Pvt Ltd and Ors v. Commissioner of GST and Central Excise, Chennai, has held as under- a. Prior to 1.6.2007 appellant's services were composite works contracts and not under "commercial or industrial construction service" (CICS) or "construction of complex service" based on the Larsen & Toubro judgment b. From 1.6.2007 onwards, liability for service tax, under CCS or CICS, applies only to pure services under relevant categories i.e., service simpliciter c. Indivisible composite contracts for construction projects fall under "Works Contract Service" from 1.6.2007. d. Service tax cannot be demanded under CICS or CCS for periods after 1.6.2007 for these appeals. iv) That construction service became taxable with effect from 1-7- 2010 by insertion of an explanation in sub clause (zzzh) of clause (105) of section 65 of the finance act, when the definition of works contract includes construction of residential complex service and the entire demand is prior to 1-7-2010 that is prior to the insertion of explanation section 65 (105) (zzzh) and hence the demand is not ....
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....uting the service tax demand. The Appellant has contended that he is eligible for exemption from payment of service tax in terms of CBEC Circular No. 108/02/2009 dated 29.01.2009. Recently, this Tribunal in the case of M/S. R.E. CONSTRUCTIONS PVT. LTD. VERSUS COMMISSIONER OF GST AND CENTRAL EXCISE, CHENNAI, 2025 (6) TMI 766 - CESTAT CHENNAI, involving similar facts and circumstances, had analysed the issue whether the demand under construction of residential complex services is sustainable in services which are of composite in nature. After introduction of Works Contract Services, the demand can be made only under Works Contract Services in the case of construction services which are composite in nature. The relevant paragraphs of the said discussion which brings out in detail the issue is as under : - "6. Investigations conducted in the Appellant's case has revealed that they are the promoters of construction of residential flats but have not registered under the service tax law, not charged any service tax from their customers and also have not filed the service tax returns. Neither they had issued / raised any invoices on their clients. The Appellant in respect of the p....
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....hich is constitutionally impermissible. The exemption notifications issued at the discretion of the executive are not sufficient to sustain the levy. The Hon'ble Apex Court has also observed that only with the introduction of WCS as a separate taxable service, statutory mechanism to exclude the value of transfer of property in goods has been prescribed. 10. The effect of the above decision is that CICS and CCS, as defined under clauses (zzq) and (zzzh), respectively, of sub section (105) of the section 65 would cover only pure service contracts, without any transfer of property in goods. 11. In various decisions the importance of classification of services has been laid down and it has been held that once the show cause notice proposes demand of service tax under a particular category of taxable service, the adjudicating / appellate authorities cannot travel beyond the scope of allegations in the show cause notice and confirm the demand under a different category of taxable service as the assesse was not at all put on notice on the new category of taxable service. These decisions were based on various decisions of higher appellate forums, where it has been held th....
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....l construction service or construction of complex service in the light of the Hon'ble Supreme Court judgment in Larsen & Toubro (supra) upto 1.6.2007. b. For the period after 1.6.2007, service tax liability under category of "commercial or industrial construction service‟ under Section 65(105)(zzzh) ibid, "Construction of Complex Service‟ under Section 65(105)(zzzq) will continue to be attracted only if the activities are in the nature of services‟ simpliciter. c. For activities of construction of new building or civil structure or new residential complex 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 cont....