TMI Blog2018 (11) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Residential Complex Service. It is the case of the Revenue that on verification of records, it was noticed that the assessee engaged in construction of independent houses and residential flats, had undertaken construction of a residential complex consisting of 56 apartments at Medavakkam during the year 2007-08 in terms of joint development agreement entered with the land owner, however without obtaining service tax registration from the Department nor had it paid service tax for undertaking such construction activity. On being pointed out about the same, the assessee undertook to obtain service tax registration and pay the dues with interest; the assessee having failed to discharge the entire service tax liability for the above project, a Show Cause Notice dated 04.08.2010 was issued proposing to demand service tax of ₹ 68,68,678/- under proviso to Section 73(1) of the Finance Act, 1994 for the period April, 2007 to September, 2009, interest under Section 75 of the Act ibid. and also penalty under Sections 76, 77 and 78 of the said Act. After due process of law, the Commissioner of Service Tax, Chennai, vide the impugned Order dated 30.01.2012 confirmed the demand of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1.6.2007, demand in respect of composite contracts would fall under works contract service only. The relevant portion of the said decision is reproduced as under:- 7.8 On the contrary, being composite works contracts, they will necessarily 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 lawmakers 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 projects 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidential complex as a service simpliciter would find a place under section 65(105)(30b) of the Act, the same activity as a composite works contract will require to be brought under section 65(105)(zzzza) Explanation (c). For both these categories for the definition of residential complex, the definition given in section 65(105)(91a) will have to be adopted as discussed above will have to be taken into account. 7.13 We find sustenance in arriving at this conclusion by a number of decisions of the Tribunal in which it has held as under:- a. In the case of Commissioner, Service Tax, New Delhi Vs. Swadeshi Construction Company - 2018-TIOL-1096-CESTAT-DEL, the Tribunal in para 7 has held as under:- 7. We note that in the present case, the SCN was issued on 27.05.2011. On that date, both the tax entries, namely, Commercial or Industrial Construction Service and Works Contract Service, were available in the Finance Act, 1994. The SCN did mention this in the first para itself. However, the proposal for tax demand was specifically made under Commercial or Industrial Construction Service under Section 65 (105) (zzq) of the Finance Act, 1994. In such situation, we note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise, Salem - 2017 (50) STR 147, the Tribunal in paragraphs 9, 10 and 11 has held as under:- 9. The Hon ble Supreme Court in re Larsen Toubro ORs.has decided thus 24. A close look at the Finance Act, 1994 would show that the five taxable services referred to in the charging Section 65(105) would refer only to service contracts simpliciter and not to composite works contracts. This is clear from the very language of Section 65(105) which defines taxable service‛ as any service provided‛. All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, under Section 67, as has been pointed out above, the value of a taxable service is the gross amount charged by the service provider for such service rendered by him. This would unmistakably show that what is referred to in the charging provision is the taxation of service contracts simpliciter and not composite works contracts, such as are contained on the facts of the present cases. It will a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r CICS for the period 16.06.2005 to 30.09.2008 cannot also sustain and are therefore set aside. So ordered 5.3 For the period 01.04.2008 to 30.09.2008, the demand confirmed is ₹ 26,88,611/-. We note that the appellant has not contested the liability under works contract for this period. The only argument brought forth by the Ld. Counsel is that they have discharged an amount of around ₹ 82 lakhs under this category after the visit of the departmental officers and therefore an amount of ₹ 36,88,611/- demanded in the impugned order should be considered as having been discharged. We find merit in his argument and hence the demand of ₹ 26,88,611/- under works contract service for the period 01.04.2008 to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the officers. However, the interest liability if any that arise on this amount if not paid already will have to be discharged by the appellants. So ordered. 8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. The services provided by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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