2017 (8) TMI 1343 - AT - Service Tax

Commercial or Industrial Construction Services - period involved is prior to 1.6.2007 - also, appellant availed credit on inputs before making payment in regard to the invoices issued - Held that - the issue with regard to service tax on Commercial or Industrial Construction Services is prior to 1.6.2007 and stands covered in the case of Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT - the demand in respect of Commercial or Industrial Construction Services is unsustainable. Eligibility of credit availed on inputs before making payment regarding to the goods - Held that - this can only be a procedural lapse - Taking into consideration that the appellants have paid the money within a short-time, we find that the demand is unsustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand of service under Commercial or Industrial Construction Services.
2. Availing credit on inputs before making payment.

Analysis:

Issue 1: Demand of service under Commercial or Industrial Construction Services
The appellant, engaged in works contract execution, faced a demand related to Commercial or Industrial Construction Services. The key argument was the applicability of the demand considering the period before 1.6.2007. The appellant's counsel relied on the judgment in the case of Commissioner of Central Excise, Kerala Vs. Larsen & Toubro Ltd. to support their stance. The Tribunal, in line with the precedent, concluded that the demand for Commercial or Industrial Construction Services was unsustainable for the period in question. Therefore, the appeal was allowed on this issue.

Issue 2: Availing credit on inputs before making payment
The second issue revolved around the appellant availing credit on inputs before settling the invoices. The appellant contended that although there was no dispute on credit eligibility, any delay in payment was merely a procedural error. It was highlighted that the appellant cleared the dues within three months of credit availing. The Tribunal acknowledged this as a procedural lapse and noted the timely payment made by the appellant. Consequently, the demand concerning credit availing on inputs before payment was deemed unsustainable. As a result, the impugned order was set aside, and the appeal was allowed, with any consequential relief granted as necessary.

In conclusion, the Tribunal ruled in favor of the appellant on both issues, emphasizing the inapplicability of the demand for Commercial or Industrial Construction Services and considering the prompt payment of dues in the credit availing process.