ETA Constructions of India Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Chennai)
Summary: CESTAT Chennai allowed the appeal of ETA Constructions of India Ltd. and set aside the service tax demand raised under Commercial or Industrial Construction Service (CICS) for the period October 2007 to March 2008. The appellant had undertaken construction of the commercial building “Chennai Citi Centre” for Chennai City Centre Holdings Pvt. Ltd. and contended that the contracts were composite in nature, involving both supply of materials and rendition of services.
The Tribunal noted that the Department itself had granted 67% abatement while quantifying service tax in the show cause notice, demonstrating the composite character of the contracts. It held that the demand on such composite contracts could be made only under Works Contract Service (WCS) and could not be sustained under CICS.
The Tribunal followed the principles laid down by the Supreme Court in CCE & Cus., Kerala v. Larsen & Toubro Ltd., 2015 (39) S.T.R. 913 (SC), and its decision in Real Value Promoters Pvt. Ltd., where demands under CICS/RCS/CCS on composite contracts for the period prior to 01.07.2012 were held unsustainable. It also relied upon Jain Housing & Construction Ltd., in which a similar demand involving composite contracts was set aside and the Department’s appeal was subsequently dismissed by the Supreme Court, as well as Sri Rosh Properties Pvt. Ltd. v. CCE & ST. Following these precedents, the Tribunal held that the impugned demand could not survive, set aside the order and allowed the appeal with consequential relief, if any.
