Case Law Details
Arasan Amuthan Construction Vs Commissioner of Central Excise and Service Tax (CESTAT Chennai)
The question of whether service tax should be applied to construction contracts executed prior to June 1, 2007, has been addressed in a landmark ruling by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Chennai. The case involved Arasan Amuthan Construction, which faced claims for unpaid service tax under the category of “construction of residential complex service.”
Background: The origin of this case dates back to a show cause notice dated October 18, 2010. The notice claimed that Arasan Amuthan Construction had rendered taxable services but failed to pay the service tax and even neglected to file a Service Tax return. The appellant argued that the construction contracts fell under the category of works contracts involving both goods and services, and therefore, couldn’t be taxed under the construction of residential complex services.
Arguments from Both Sides: Arasan Amuthan Construction contended that their service falls under works contracts, a category which cannot be taxed for the period under dispute (2005-06 to 2006-07). The original authority and the Commissioner (Appeals), however, disagreed with this contention, confirming the tax demand.
Legal representatives for the appellant drew attention to a precedent set by the Hon’ble Supreme Court in the case of Commissioner of Central Excise and Customs, Kerala v. M/s. Larsen & Toubro Ltd. According to this decision, works contract services could not be taxed prior to June 1, 2007.
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