2012 (7) TMI 469 - AT - Service Tax

Refund claim amendment in the scope of existing services - works of drawings and blue print and interior decorator services - assessee claimed wrong deposit under construction services Revenue claim that the services undertaken correctly fall under the category of construction services as per Section 65 (30a) for the period in question Held that - The definition of construction services was amended along with the new heading clause c of Section 65 (25b) with effect from 16.6.2005 relate to the completion and finishing services - if the Revenue s stand that such services were covered by the earlier definition is accepted, the newly introduced clause c would become redundant as there is no need to introduce the said clause - the activities undertaken by the respondents were the services contained in the definition under newly introduced clause c of Section 65 (25b) of the Act with effect from 16.6.2005 and not clause b of Section 65 (30a) as it existed prior to 16.6.2005 against revenue.

Summary

Issues:
1. Refund claim for wrongly deposited Service Tax under construction services.
2. Interpretation of statutory provisions pre and post 16.6.2005 regarding construction services.
3. Applicability of completion and finishing services under the amended definition.
4. Comparison of definitions pre and post 16.6.2005.
5. Judicial precedent on finishing services pre and post 16.6.2005.

Issue 1: Refund claim for wrongly deposited Service Tax under construction services:
The case involved a refund claim by the respondents for Service Tax amounting to Rs. 5,44,421, which they had mistakenly deposited under the impression that their activities constituted construction services. The respondents argued that the activities were not construction services as they were carried out based on drawings and blueprints provided by architects and interior decorators appointed by their clients directly.

Issue 2: Interpretation of statutory provisions pre and post 16.6.2005 regarding construction services:
The Revenue contended that even after the statutory amendment effective from 16.6.2005, the completion and finishing services would still be taxable under the earlier clause 'b' of Section 65 (30a) which existed before 16.6.2005. However, the respondents argued that the activities fell under the newly introduced clause 'c' of Section 65 (25b) post 16.6.2005, expanding the scope of commercial and industrial construction services.

Issue 3: Applicability of completion and finishing services under the amended definition:
The Commissioner (Appeals) analyzed the activities undertaken by the respondents, including site preparation, civil works, carpentry, and miscellaneous jobs, and concluded that these services aligned with the definition under the newly introduced clause 'c' of Section 65 (25b) post 16.6.2005. This interpretation was based on the expanded scope of services under the amended provisions.

Issue 4: Comparison of definitions pre and post 16.6.2005:
The judgment compared the definitions of construction services pre and post 16.6.2005, highlighting the specific inclusion of completion and finishing services like glazing, plastering, painting, and carpentry under the amended definition. The introduction of clause 'c' post 16.6.2005 indicated a broader scope of services that were not covered under the earlier provisions.

Issue 5: Judicial precedent on finishing services pre and post 16.6.2005:
The Tribunal referred to a previous case where finishing services were held not to be covered by the definition for the earlier period but were included under commercial or industrial services post 16.6.2005. This precedent supported the view that the completion and finishing services provided by the respondents were taxable under the amended provisions, aligning with the Commissioner (Appeals) decision.

In conclusion, the judgment upheld the Commissioner (Appeals) decision, rejecting the Revenue's appeal and affirming that the services provided by the respondents were not taxable under the category of construction services as per the pre-16.6.2005 provisions but fell under the expanded scope of services post the statutory amendment.