Custom, Excise & Service Tax Tribunal
Visakhapatnam -Visakhapatnam - G S T vs Comfort Homes on 13 August, 2025
1 Appeal No. ST/21808, 21905,
22072 & 22163/2014
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH - COURT NO. - I
Service Tax Appeal No. 21808 of 2014
(Arising out of Order-in-Original No.VIZ-STX-001-COM-008-14 dated 28.01.2014 passed
by Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam)
M/s KSR Developers Pvt Ltd., .. APPELLANT
KSR Mansions, 50-1-23/90,
Main Road, Seethammadara,
Visakhapatnam.
Andhra Pradesh - 530 013.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam- GST GST Commissionerate, Port Area, Visakhapatnam, Andhra Pradesh - 530 035.
WITH Service Tax Appeal No. 21905 of 2014 (Arising out of Order-in-Original No.VIZ-STX-001-COM-009-14 dated 27.01.2014 passed by Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam) M/s Comfort Homes .. APPELLANT Survey No. 26/11, MIG 10, HB Colony, Purushothapuram, Visakhapatnam.
Andhra Pradesh - 530 051.
VERSUS Commissioner of Central Tax .. RESPONDENT Visakhapatnam- GST GST Commissionerate, Port Area, Visakhapatnam, Andhra Pradesh - 530 035.
WITH Service Tax Appeal No. 22072 of 2014 (Arising out of Order-in-Original No.VIZ-STX-001-COM-008-14 dated 28.01.2014 passed by Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam) Commissioner of Central Tax .. APPELLANT Visakhapatnam- GST GST Commissionerate, Port Area, Visakhapatnam, Andhra Pradesh - 530 035.
VERSUS M/s KSR Developers Pvt Ltd., .. RESPONDENT KSR Mansions, 50-1-23/90, Main Road, Seethammadara, Visakhapatnam.
Andhra Pradesh - 530 013.
AND Service Tax Appeal No. 22163 of 2014 (Arising out of Order-in-Original No.VIZ-STX-001-COM-009-14 dated 27.01.2014 passed by Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam) 2 Appeal No. ST/21808, 21905, 22072 & 22163/2014 Commissioner of Central Tax .. APPELLANT Visakhapatnam- GST GST Commissionerate, Port Area, Visakhapatnam, Andhra Pradesh - 530 035.
VERSUS
M/s Comfort Homes .. RESPONDENT
Survey No. 26/11, MIG 10,
HB Colony, Purushothapuram,
Visakhapatnam.
Andhra Pradesh - 530 051.
APPEARANCE:
Shri Suresh Sastri Dorbala, CA for the Assesse. Shri B. Sangameshwar Rao, Authorised Representative for the Department. CORAM: HON'BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL) HON'BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL) FINAL ORDER No. A/30302-30305/2025 Date of Hearing:13.08.2025 Date of Decision:13.08.2025 [ORDER PER: A.K. JYOTISHI] M/s KSR Developers Pvt Ltd., and M/s Comfort Homes have come in appeal against the order of the Adjudicating Authority, vide appeal no. ST/21808/2014 and ST/21905/2014 respectively. The Revenue is also in appeal against the said order of the Commissioner vide appeal no. ST/22072/2014 and ST/22163/2014 respectively.
2. The issue, in brief, is that the appellants are in the business of construction of residential complex. The period of dispute is January 2011 to March 2012.
3. Learned Advocate points out that they have not been extended benefit of Notification No. 1/2006-ST and that they are entitled benefit of Notification No. 1/2006-ST dated 01.03.2006 for the computation of the value of the service, whereas, the Department is insisting on extending only the composition scheme. He also submits that in case, the value of the land is also included and it is not in dispute. He also relied on the clarification issued by the CBIC vide Circular No. F.No. 332/22/2015-TRU dated 3 Appeal No. ST/21808, 21905, 22072 & 22163/2014 05.09.2016 whereby it has clarified that the said benefit would be available for construction of residential complex. He is also submitting that because of prevailing confusion as regards proper classification and admissibility of various notifications and composition schemes in relation to construction services, the extended period cannot be invoked.
4. Learned AR, in so far as the Department appeal is concerned, submits that they had come in appeal only to the extent of extending of composition scheme by the Adjudicating Authority while confirming the demand, as the appellant had not opted for the scheme, which is a mandatory condition for availing the scheme.
5. Learned AR also fairly concedes that there has been amendment in the provisions relating to Service Tax (Determination of Value) Rules 2006 (Rules) vide Finance Act 2017, whereby, the Rule 2A has been amended retrospectively to, inter alia, cover a situation wherever there is an inclusion of land or undivided share of land and the value has to be decided in accordance with the amended Rule 2A(ii). Further, this amendment was made effective for the period 1st day of July 2010 to 30.06.2012.
6. Heard both the sides and perused the records.
7. We find that the short question for determination is whether there is any service tax payable on the services provided by the appellant during the relevant period or otherwise. In so far as period prior to 01.07.2010 is concerned, the issue is no longer res integra and no service tax is liable to be paid irrespective of whether it is covered under WCS or under construction of residential complex services. However, for the period beyond 01.07.2010 there is a liability to pay service tax by them under WCS as well as under residential complex services depending on the classification 4 Appeal No. ST/21808, 21905, 22072 & 22163/2014 adopted by the appellant. Therefore, the only question which needs to be decided whether they are entitled for the amended provision of the Rules in terms of amendment brought in by the Finance Act 2017 or not. We find that the provisions have been amended for the relevant period retrospectively and therefore, they would obviously be entitled for determination of the value in accordance with that.
8. On the issue of limitation, we find that appellant has a strong case as during the relevant period there were certain confusion on leviability of service tax on construction service, as also on extension of Composition Scheme, where land value was also included. This also got further manifested when the Government itself brought retrospective amendment. In view of the same, there could not be any deliberate intent or attempt to evade the tax, therefore, extended period is not invokable in the facts of the case. Further, since extended period is not invokable, penalty under Section 78 is also not sustainable.
9. In view of the discussions, supra, the matter is remanded back to the original Adjudicating Authority for re-quantification of total demand keeping in view of the observations made in the foregoing paras.
10. As far as the Department's appeals are concerned, we find that this issue will also not survive, in view of the observations, supra, as now the duty is required to be re-quantified in terms of retrospective amendment in the Rules. Therefore, the appeals filed by the Department are disposed of accordingly.
5 Appeal No. ST/21808, 21905,
22072 & 22163/2014
11. Appeals filed by the appellants are allowed by way of remand back to the Adjudicating Authority.
(Dictated and pronounced in open court) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) jaya