CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL HYDERABAD REGIONAL BENCH - COURT NO. – I Service Tax Appeal No. 30739 of 2016 (Arising out of Order-in-Original No.. HYD-EXCUS-001-COM-003-16-17 dated 25.04.2016 passed by Commissioner of Customs, Central Excise & Service Tax, Hyderabad-I)

Commissioner of Central Tax .. APPELLANT And Central Excise Secunderabad – GST Kendriya Shulk Bhavan, L.B. Stadium Road, Basheerbagh, Hyderabad, Telangana – 500 004.

VERSUS M/s Mehta And Modi Homes .. RESPONDENT

5-4-187/3 & 4, 2^nd Floor, Soham Mansion, M.G. Road, Secunderabad, Telangana – 500 003.

AND Service Tax Appeal No. 30753 of 2016 (Arising out of Order-in-Original No.. HYD-EXCUS-001-COM-003-16-17 dated 25.04.2016 passed by Commissioner of Customs, Central Excise & Service Tax, Hyderabad-I)

M/s Mehta And Modi Homes .. APPELLANT

5-4-187/3 & 4, 2^nd Floor, Soham Mansion, M.G. Road, Secunderabad, Telangana – 500 003.

VERSUS Commissioner of Central Tax .. RESPONDENT & Central Excise Secunderabad – GST Kendriya Shulk Bhavan, L.B. Stadium Road, Basheerbagh, Hyderabad, Telangana – 500 004.

APPEARANCE:

Shri Lakshman Kumar K, CA for the Assesse.

Shri K. Sreenivasa Reddy & Shri V R Pavan Kumar, ARs for the Respondent.

CORAM: HON’BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL)

HON’BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL)

FINAL ORDER No. A/30291-30292/2025 Date of Hearing:22.07.2025 Date of Decision:22.07.2025 [ORDER PER: A.K. JYOTISHI]

In appeal no. ST/30739/2016, the Department is in appeal against the common Order-in-Original No. HYD-EXCUS-001-COM-003-16-17 dated 25.04.2016, whereby the Commissioner has upheld the demand under the category of construction of Residential Complex service during the period 01.01.2011 to 31.12.2011 (SCN dated 10.04.2012) and 01.01.2012 to 30.06.2012 (SCN dated 03.12.2013). The main ground taken by the Department is that while the show cause notice has proposed classification under the Works Contract Service (WCS) falling under 65(105)(zzzza) of Finance Act 1994, while it has been upheld under Construction of Complex Service. Therefore, the Commissioner has clearly gone beyond the classification proposed in the show cause notice by holding said service under a different category of service.

2. Similarly, the appellant M/s Mehta And Modi Homes have also come in appeal against the said order dated 25.04.2016 to the extent the demand has been confirmed by the Commissioner against them under the category of Construction of Residential Complex Service.

3. Learned AR has mainly submitted that the Department is aggrieved because the Commissioner has gone beyond the scope of the show cause notice by holding the said classification under the category of construction of complex service and also confirming the demand there under. He also points out that admittedly this is not in dispute that the service would fall within the category of WCS, as there is a transfer of property in goods in the execution of contract. Therefore, there is a factual error by classifying it under Heading 65(105)(zzzh) as it would only cover construction simplification where material portion is not involved. He has relied on catena of judgments in support that the order passed where the Adjudicating Authority has gone beyond the show cause notice is bad in law.

4. On the other hand, Learned CA is submitting that they have appealed against the said order on two grounds. Firstly, the Commissioner has travelled beyond the scope of the show cause notice by confirming the demand under construction of complex service, in as much as the proposal was under the category of WCS. He is not disputing that this would fall under WCS, but he is pleading that as held by various Co-ordinate Benches, confirmation of demand beyond the scope of show cause notice cannot be sustained. Secondly, he also argues that even if it is falling under WCS, they were engaged in construction of independent houses, as is evident from the two contracts, which were entered by them with the prospective buyers, on