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TMI Blog2025 (3) TMI 1247X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod December 2005 to June 2008, issued a Show Cause Notice proposing demand of Service Tax along with appropriate interest and imposing of penalties. After due process in law, the Original Authority confirmed the proposals in the Show Cause Notice. Aggrieved by the same the appellant preferred an appeal which stood rejected by the Impugned Order-in-Appeal and hence the appellant is before this Tribunal. 3. Ld. Counsel Ms. Radhika Chandrasekhar appeared and argued for the appellant. Ld. Counsel would submit that the activity of the appellant merits classification under Works Contract Service as the appellant is a developer engaged in development of residential projects, and therefore the proposal to demand Service Tax under the construction of Residential Complex Service is not tenable. Ld. Counsel would submit that the two projects namely, Virushabadri and Garudathri to which the demand pertains to, were completed prior to 01.06.2007 i.e. before the introduction of „Works Contract Service‟. It is the submission of the Ld. Counsel that the appellants are also registered under VAT/Sales Tax provisions and have discharged the VAT applicable in respect of the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period under dispute. We find that it is undisputed that the appellant is engaged in a composite contract involving provision of service as well as transfer of property in goods. The appellants‟ contention that they have discharged applicable VAT on the transactions also remains uncontroverted. We find that the issue whether, service tax could be levied on Composite Works Contract prior to the introduction of the Finance Act, 2007, by which the Finance Act, 1994 came to be amended to introduce Section 65(105)(zzzza) pertaining to Works Contract, was a subject matter of dispute and litigation and was finally settled by the Hon‟ble Supreme Court in the case of Commissioner of Central Excise & Customs, Kerala vs. Larsen & Toubro Ltd. (2015) 39 STR 913. The relevant portion of the Judgement is reproduced as under: 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tracts. It is this scheme and this scheme alone which complies with constitutional requirements in that it bifurcates a composite indivisible works contract and takes care to see that no element attributable to the property in goods transferred pursuant to such contract, enters into computation of service tax. 27. In fact, the speech made by the Hon‟ble Finance Minister in moving the Bill to tax Composite Indivisible Works Contracts specifically stated :- "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 levy service tax on services involved in the execution of a works contract. However, I also propose an optional composition scheme under which service tax will be levied at only 2 per cent of the total value of the works contract." 28. Pursuant to the aforesaid speech, not only was the statute amended and rules framed, but a Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 was also notified in which service providers could opt to pay service tax at percentages ranging from 2 to 4 of the gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-Finance Act, 2007, on indivisible/Composite Works Contract, the service tax is not leviable, number of decisions have been dealt with and considered by this Court in the aforesaid decision; (iv) That subsequently, the decision of this court in the case of Larsen and Toubro Limited (supra) has been followed and considered by this Court in the case of Bhayana Builders Private Limited and Ors., (supra); (v) That after the decision of this Court in the case of Larsen and Toubro Limited (supra) rendered in the year 2015, the said decision has been consistently followed by various High Courts and the Tribunals; (vi) The decisions of the various High Courts and the Tribunals, which were passed after following the decision of this Court in the case of Larsen and Toubro Limited (supra) have attained finality and in many cases, the Revenue has not challenged the said decisions; (vii) No efforts were made by the Revenue to file any review application to review and/or recall the judgment and order passed by this Court in the case of Larsen and Toubro Limited (supra). If the Revenue was so serious in their view that decision of this Court in the case of Larsen and Toubro Limited (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence available in this regard to avoid prolixity. Suffice to note that similar view has been taken earlier by this Tribunal in more or less similar facts and circumstances, as can be seen from the decisions in Commissioner of Service Tax vs. Jain Housing and Construction Ltd. (2023) 10 Centax 171 (S.C), Real Value Promoters Ltd. vs. Commissioner of GST vide Final Order No. 42436-42438/2018 dated 18.09.2018, BBC City Park vs. Commissioner of GST & CE vide Final Order No.ST/A/40834/2024 dated 10.07.2024, Pragati Edifice Pvt. Ltd. vs. Commissioner of CCE & ST Final Order No.31010- 31011/19 dated 18.09.2019 and Krishna Homes vs. CCE (2014) 34 STR 881 to cite a few. The ratio of these decisions would also apply in the instant case. 8. In the light of the ratio of the aforesaid binding decisions of the Apex Court and coordinate benches of the Tribunal, we hold that the services provided by the appellant in respect of the projects executed by them for the relevant period, being in the nature of composite works contract cannot be brought within the fold of "construction of complex" service and thus the impugned OIA upholding the impugned OIO confirming the demand along with applicable in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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