2012 (12) TMI 1112 - HC - Central Excise

Summary

Issues involved: Challenge to demand/show cause notice for service tax on works contracts awarded during specific periods.

Details of the judgment:

1. The petitioner challenged a demand/show cause notice for service tax on works contracts awarded from 2007-08 to 2011-12. The petitioner argued that works contracts awarded before 1st July 2012 cannot be taxed under Section 65B(54) inserted by the Finance Act, 2012. However, the court clarified that certain works contracts were taxable from 1st June 2007 under sub-clause (zzzza) of Section 65(105) by the Finance Act, 2007. Works contracts of civil nature completed before 1st June 2007 are not liable for service tax, but those awarded before that date and still under completion on or after 1st June 2007 are taxable. The petitioner, a civil contractor, was advised to submit explanations to the Commissioner regarding the contracts in question.

2. The court emphasized that if a civil works contract was awarded before 1st June 2007 but was still under completion on or after that date, or if payment was received after 1st June 2007, it would be subject to service tax. Similarly, works contracts of civil nature awarded between 1st June 2007 and 1st July 2012 would also be liable for service tax. The legal position was clarified, and the petitioner was directed to provide necessary information to the Commissioner, Central Excise, Allahabad.

3. The writ petition was disposed of after the court's clarification on the liability of service tax on works contracts of civil nature awarded during specific periods. The petitioner was instructed to present their case before the Commissioner, Central Excise, Allahabad for further proceedings.