M/s. Cotton City Developers Pvt. Ltd. Versus Commissioner of GST & Central Excise
Service Tax
2018 (7) TMI 1389 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 16-7-2018
Appeal No. ST/275/2011 – Final Order No. 42035 / 2018
Service Tax
Hon'ble Ms. Sulekha Beevi C.S., Member ( Judicial ) And Hon'ble Shri Madhu Mohan Damodhar, Member ( Technical )
Shri M. Karthikeyan, Advocate for the Appellant
Shri K. Veerabhadra Reddy, JC ( AR ) for the Respondent
ORDER
Per Bench
Brief facts are that the appellants were providing construction service under Commercial or Industrial Construction Service and residential complex service. During the course of scrutiny of ST-3 returns, it was noticed by the department that even though they were continuing with providing of taxable service under Commercial or Industrial Construction Service and the construction of residential complex service, they stopped paying service tax from October 2006 onwards. They had thus not paid service
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te contract can be subjected to levy of service tax only from1.6.2007 under works contract service. With regard to the demand of service tax after 1.6.2007, he submitted that when the said services fall under Works Contract Service prior to 1.6.2007, the demand for the same under construction of residential complex service cannot sustain, since the projects are ongoing projects from 2006 – 09. He relied upon the Board Circular No. 332/35/2006-TRU dated 18.2006 to contend that when the construction activities have been carried out by engaging a contractor, then the liability to pay service tax is on the contractor and not on the developer / promoter. The appellant being a promoter / developer, is not liable to pay service tax. That the contractor has already discharged the service tax on the very same construction activities of these two complexes, the demand cannot sustain.
3. The ld. AR Shri K. Veerabhadra Reddy supported the findings in the impugned order. He referred to Circular No
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g the services of a contractor is not liable to pay service tax and it is the contractor who is liable to pay. Undisputedly, the contractor has discharged the service tax on the construction activities. The demand is made against the appellant merely alleging that he is the main contractor and although the contractor has discharged the service tax, it is only the sub-contractor and therefore the appellant is liable to pay service ax. We do not find any merit in this allegation of the department. The construction services had already suffered service tax as the contractor who is engaged in the construction of building/complex has discharged service tax. Further, the circular also makes it clear that when a contractor is engaged in construction of residential complex, the liability is on the contractor to pay the service ax. The Tribunal in the case of Logos Construction Pvt. Ltd. Vs. Commissioner of Central Excise, Chennai – 2018 (6) TMI 1361 had occasion to consider a similar issue and
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