2014 (9) TMI 179 - AT - Service Tax

Repair, alteration, renovation or restoration service - Commercial or Industrial Construction - whether the activity of interior work such as plastering of walls, tiling of floor, carpentry work, partition work, work relating to bathroom/toilets, etc. undertaken by the appellants would fall under clause (d) of Section 65 (25b) - Held that - the activity undertaken by the appellants, as may be seen from the work orders placed before us, appears to merit classification under Clause (d) of Section 65 (25b). Consequently, the benefit of abatement would be available under Notification 1/2006. In respect of the period post 01/06/2007, where the appellants have discharged the service tax liability under Works Contract Service, they shall also produce the copies of the contracts to ascertain whether the contract was entered into prior to 01/06/2007 or afterwards. If the contracts were entered into prior to 01/06/2007, they would be governed by the provisions of Section 65 (25b) relating to commercial or industrial construction service . If the contracts were entered into on or after 01/06/2007, then they would be covered under the provisions of Works Contract Service as held by the hon ble apex Court in the case of Nagarjuna Construction Co. Ltd. 2012 (11) TMI 404 - SUPREME COURT . - Decided in favor of assessee by way of remand.

Summary

Issues:
1. Determination of service tax liability for interior work activities.
2. Classification of activities under Section 65(25b) of the Finance Act, 1994.

Issue 1: Determination of service tax liability for interior work activities

The judgment revolves around the service tax demand confirmed against the appellants for interior work activities. The question at hand is whether the activities undertaken by the appellants, such as plastering of walls, tiling of floor, carpentry work, etc., fall under clause (d) or clause (c) of Section 65(25b) of the Finance Act, 1994. The appellants claim that their work constitutes repair, alteration, renovation, or restoration of existing buildings, entitling them to abatement under Notification 1/2006-ST. The Revenue, on the other hand, argues that the activities amount to completion and finishing services, attracting service tax liability.

Issue 2: Classification of activities under Section 65(25b) of the Finance Act, 1994

The judgment analyzes the statutory definitions under Section 65(25b) to determine the appropriate classification of the appellants' activities. It is established that completion and finishing services apply to new or unfinished buildings, while repair, alteration, renovation, or restoration pertain to existing structures. The judgment concludes that the appellants' work aligns more closely with clause (d) of Section 65(25b), making them eligible for abatement under Notification 1/2006-ST. However, due to the absence of submitted contracts for verification, the appellants are directed to provide copies of contracts to establish the nature of their activities. The judgment emphasizes the importance of contract details in determining the applicability of different clauses under Section 65(25b) and directs the appellants to submit contracts for both pre and post-01/06/2007 periods for further assessment.

In summary, the judgment addresses the service tax liability concerning interior work activities, focusing on the classification under Section 65(25b) of the Finance Act, 1994. It highlights the distinction between completion and finishing services for new buildings and repair, renovation, or restoration for existing structures. The appellants are granted a remand to provide contract details for verification, ensuring the correct application of relevant clauses and abatement provisions.