SUSHEN CONSTRUCTIONS P. LTD. Vs. CESTAT, CHENNAI

JUDGEMENT

(1.) This Civil Miscellaneous Appeal filed by the assessee is directed against the Miscellaneous Order No. 42030/2013 (ST/S/40183/2013 in ST/40201/2013) dated 05-08-2013 passed by the Customs, Excise and Service Tax Appellate Tribunal. The appellant is engaged in construction activities both of commercial and residential complexes. During the course of investigation by the Revenue, it came to light that the appellant did not pay Service Tax on three projects executed by them during the period from October 2004 to September 2009. A show cause notice was issued to the appellant, demanding Service Tax short-paid. On adjudication, the Service Tax of Rs. 1,15,73,087/- was ultimately demanded along with interest, and penalty. Aggrieved by this, the appellant filed appeal before the Customs, Excise and Service Tax Appellate Tribunal (hereinafter called as the "CESTAT") along with application for waiver of pre-deposit.

(2.) Before the CESTAT, it was contended by the appellant that the nature of contract was works contract, which came to be subjected to Service Tax for the first time with effect, from 1-6-2007 under Section 65(105)(zzzza) of the Finance Act, 1994 and contended that the demand was not sustainable.

(3.) The Revenue stated that the demand was based on the ledger entries showing receipt from customers and Bank Statement was also taken for corroboration. Further, the Revenue contended that in the projects undertaken by the appellant, the undivided share of land was transferred to prospective buyers of constructed area and registered in their name; thereafter, consideration for construction was taken from such clients and construction activities completed and on completion of construction, the possession of constructed area was handed over to the persons to whom undivided shares of land were sold. Therefore, it was submitted that it was clear that, the construction activity was undertaken on the land already registered in the name of the client and therefore, service was being provided by the appellant to such clients. Further, the Revenue placed reliance on the earlier decision of the Tribunal in the case of LCS City Makers v. Commissioner of Service Tax Chennai, 2013 30 STR 33, wherein, on a similar issue, the Tribunal decided that in such cases, Service Tax is leviable.