2014 (12) TMI 825 - AT - Service Tax

Benefit of abatement in terms of Notification No. 15/2004-S.T., dated 10-9-2004 and 1/2006-S.T., dated 1-3-2006 - construction service - Held that - Appellant is required to undertake the activity of plinth leveling, slab casting, plaster work (inner & outer), flooring and tiles terracing. Revenues contention that inasmuch as flooring, tiles terracing etc. relate to the finishing and completion activities stand specifically covered under the said activity, it has to be held that the appellant was providing only finishing services in which he will not be entitled to the benefit of abatement in terms of the Notification. However we find that it is not only flooring and tile activities which the appellant has undertaken. Reading of the entire contract shows complete construction activity which include flooring and tile activity. As such we find no infirmity in the views adopted by the Commissioner (Appeals) - Decided against Revenue.

Summary

Issues:
1. Dispute over service tax liability for "construction service" provided.
2. Interpretation of the scope of work in the agreement.
3. Eligibility for abatement under Notifications No. 15/2004-S.T. and 1/2006-S.T.

Analysis:
1. The case involved a dispute regarding service tax liability for the "construction service" provided by the respondent. The respondent was registered with the Service Tax Department and was discharging the service tax liability after availing abatement benefits under Notifications No. 15/2004-S.T. and 1/2006-S.T. The show cause notice raised a demand for duty alleging that the services provided were only completion and finishing services, not eligible for abatement.

2. The Commissioner (Appeals) examined the agreement between the respondent and their customers to determine the scope of work. The agreement listed various activities like plinth leveling, slab casting, plaster work, flooring, and tiles terracing. The Commissioner found that the work carried out was related to the construction of a complex, not just completion or finishing activity, ruling in favor of the assessee.

3. The Revenue contended that activities like flooring and tiles terracing constituted finishing and completion activities, making the appellant ineligible for abatement. However, upon reviewing the entire contract, the Tribunal found that the appellant undertook complete construction activities, including flooring and tile work. Therefore, the Tribunal upheld the Commissioner (Appeals)' decision, rejecting the Revenue's appeal and confirming the eligibility of the appellant for abatement under the Notifications.

This judgment clarifies the distinction between construction services and completion/finishing services, emphasizing the importance of analyzing the entire scope of work in agreements to determine tax liabilities accurately.