Commissioner of Central Tax Vs Trendesent Builders Pvt Ltd (CESTAT Hyderabad)
CESTAT Hyderabad rejected the Revenue’s appeal and allowed the cross appeal filed by Trendsent Builders Pvt Ltd concerning service tax on construction of residential complexes during 2008-09 to 2010-11. The respondent had paid service tax on its own share under Construction of Complex Services and Works Contract Service but had not paid tax on flats allotted to landowners, treating them as consideration for land. A Show Cause Notice dated 23.10.2012 demanded service tax of Rs. 15,62,320/- under Construction of Complex Services, Rs. 27,77,04,728/- under Works Contract Service and Rs. 20,946/- for transportation of goods by road. The impugned order confirmed Rs. 1,19,71,782/- under Works Contract and GTA services, along with penalties, while dropping a demand of Rs. 26,72,74,320/-.
Revenue challenged the dropping of the latter demand, contending that the services were classifiable as Works Contract Service. The respondent relied on the Tribunal’s decision in M/s R V Nirman Pvt Ltd., which held that construction of residential complexes by builders/developers for their own projects was not subject to service tax before 01.07.2010. CESTAT followed that decision and rejected the Revenue’s appeal to that extent. It also held that the same decision covered the issue concerning flats allotted to landowners and set aside the impugned order on that ground. However, as there was no appeal or cross-objection concerning the Rs. 20,946/- demand for goods transported by road, that demand was upheld. The Revenue appeal was rejected and the respondent’s cross appeal was allowed.
