MCM Construction And Real Estate Private Ltd Vs Commissioner (Delhi High Court)
The Delhi High Court has ruled in favor of MCM Construction And Real Estate Private Ltd., allowing the company to proceed with its appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) by waiving the requirement for a balance pre-deposit. The decision, delivered on May 15, 2025, addresses a dispute over service tax liability on construction services and the conditions for appealing such demands.
The case originated from two Show Cause Notices (SCNs) issued by the Central Goods and Service Tax (CGST) Department. The first SCN, dated March 7, 2008, covered the periods 2005-06 and 2006-07. A second SCN, dated November 28, 2008, pertained to the period 2007-08. Both notices raised demands against MCM Construction, alleging non-payment of service tax on taxable services, specifically “construction of complex services” and “commercial or industrial construction services.”
MCM Construction filed replies to both SCNs, arguing that the services it provided constituted “composite works contracts,” which, in its view, were not liable to service tax and were entitled to exemptions under various notifications (Notification No. 18/2005-ST, Notification No. 15/2004-ST as amended, and Notification No. 1/2006). However, the Order-in-Original, passed on January 5, 2024, did not grant these exemptions. The total demand raised against the petitioner amounted to Rs. 4,28,08,029/- for the first SCN period, encompassing service tax, education cess, and other cesses. The overall service tax liability was determined to be Rs. 8,35,86,570/-, with the demand in the Order-in-Original representing the remaining unpaid amounts after some prior payments by the petitioner.
