TMI Blog2022 (1) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... ically made taxable under works contract service with effect from 1.6.2007. The manner of determination of the value of such service portion is prescribed vide Rule 2(A) of Service Tax (Determination of Value) Rules, 2006 framed under sec. 94(2) of the Act. Alternatively in the form of Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 was introduced to pay service tax at a lesser rate on the gross amount (including the value of transfer of property in the goods). The issue as to whether a composite contract which has both transfer of property in goods as well as rendering of service would fall under CICS / CCS / CRCS was examined and finally settled by the Hon'ble Supreme Court in the case of COMMISSIONER, CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Show Cause Notice demanding service tax for the period January 2009 to January 2010 was issued to the appellant. After due process of law, the adjudicating authority dropped the proceedings initiated in the Show Cause Notice accepting the contention of the appellant that they are not liable to pay service tax. Against such order, department preferred appeal before Commissioner (Appeals) and vide the order impugned, the Commissioner (Appeals) confirmed the demand proposed in the Show Cause Notice. Hence this appeal by the appellants. 2. The learned counsel Shri M.N. Bharathi appeared and argued on behalf of the appellant. He submitted that the appellant was discharging their service tax liability till December 2008. However, from Januar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimate owner enters into a contract for construction of a residential complex with a promoter / builder / developer, who himself provides service of design, planning and construction; and after such construction the ultimate owner receives such property for his personal use, then such activity would not be subjected to service tax, because this case would fall under the exclusion provided in the definition of 'residential complex'. However, in both these situations, if services of any person like contractor, designer or a similar service provider are received, then such a person would be liable to pay service tax. 3. He further argued that the demand in the Show Cause Notice is to pay service tax under the classification con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51/2/2012-ST dated 16.2.2012. In the said circular, it is stated that prior to 1.7.2010, construction service provided by the builder / developer will not be taxable in terms of Board circular dated 29.1.2009. It was observed in para 6.7 that the appellant had rendered the construction service after selling the land to the customers. Thus, the land belonged to the customers and not the builder / developer while rendering the service. On such ground, the adjudicating authority held that the construction being rendered to an individual, it is not taxable as per the Board circular. 7. Be that as it may, it is not in dispute that the construction services are composite in nature involving both supply of goods and rendering service. The defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant paragraph is noticed as under:- 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 appellant in respect of the projects executed by them for the period prior to 1.6.2007 being in the nature of composite works contract cannot be brought within the fold of commercial or industrial 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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