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2019 (11) TMI 679 - AT - Service TaxConstruction services - Construction of Complex Service - appellant had a strong belief that they are not liable to pay service tax but still they calculated the service tax liability and interest for the period from 16.6.2005 to 31.3.2006 after applying the abatement provided under Notification No.1/2006-ST for ‘Construction of Complex Service’ - demand of service tax - Health Club and Fitness Centre Service - Real Estate Agent Service - Interior Decoration Service - Maintenance or Repair Service - CENVAT credit - credit utilization in excess of 20% or not. HELD THAT:- It is not in dispute that the entire activity of the appellant is construction of residential apartments and such activity is in the nature of indivisible works contract involving transfer of property in goods along with provision of service. The appellants are paying VAT under the State Government by treating the said transaction as works contract - it is settled law that indivisible works contract is taxable only with effect from 1.6.2007 with the introduction of separate taxable service of works contract under Section 65(105)(zzzza). The Hon’ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS VERSUS M/S LARSEN & TOUBRO LTD. AND OTHERS [2015 (8) TMI 749 - SUPREME COURT] had held that prior to 1.6.2007, there was no charging section to specifically levy service tax on works contract on service and in the present case, the entire period is prior to 1.6.2007 - therefore, the appellants are not liable to pay service tax on the entire activity of raising the construction and providing the various category of services viz., Health and Fitness Centre Service, Maintenance or Repair Service or Real Estate Agent Service. CENVAT Credit - demand of excess 20% as per rule 6 - Applicability of Rule 6 of CCR - contention of the Department in demanding excess of 20% is that the appellants are providing both taxable as well as exempted service and therefore, hit by Rule 6(3)(c) of CENVAT Credit Rules, 2004 - HELD THAT:- In the present case, the appellant give full constructed apartment to the owner of the land and this by no stretch of imagination can be seen as a service provided by the appellant to the land owners. Co-developers do not provide any service to each other and this has further been clarified by the CBEC in Circular No.108/02/2009 dated 29.1.2009 - the preliminary requirement to fall within the definition of exempted service is that the activity undertaken should be service whereas the activity undertaken by the appellant in the present case is not defined to be a taxable service. Appeal allowed - decided in favor of appellant.
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