2015 (11) TMI 1346 - AT - Service Tax

Valuation - Construction Services (CS) / Commercial or Industrial Construction Service - Completion and Finishing Services - benefit of abatement under Notification No.15/2004-ST dated 10.09.2004 and Notification No.1/2006-ST, dated 01.03.2006 - Held that - From the sample scrutiny of work-orders provided by the appellants, it is evident that they were providing various interior services such as wooden & metal partition, plastering, painting, civil work, joinery items, floor & wall tiling and other similar services in respect of buildings or civil structures or part thereof. The item rates in the work-orders were inclusive of cost of material. In the light of the type of activities which are covered under the scope of completion and finishing services as per the definition quoted above, there hardly remains any doubt that the services rendered by the appellants were more appropriately covered under the scope of completion and finishing services, and therefore, the abatement of 67% under Notification No.15/2004-ST or No.1/2006-ST is clearly inadmissible as completion and finishing services have been expressly excluded from the coverage of the said Notification. To claim exemption under Notification No.12/2003-ST it is not necessary that invoices should separately indicate the value of the goods sold and the benefit of the said notification can be granted when there is transfer of possession of goods - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Appeal against Orders-in-Original confirming service tax demand under Construction Services and denial of abatement benefits under specific notifications.

Analysis:
The appellants contended that they provided services involving the supply of goods, paid service tax with 67% abatement under specific notifications, and engaged in internal fit-out services beyond completion and finishing services. They argued that previous CESTAT judgments supported excluding the cost of material sold during service provision from the assessable value.

The Departmental Representative argued that the services provided fell under completion and finishing services, thus disqualifying the appellants from the 67% abatement benefits. However, they acknowledged that the benefit of another notification could be considered if conditions were met regarding material supplied during service provision.

The Tribunal analyzed the work-orders provided by the appellants and found that the services rendered aligned with completion and finishing services as defined under the law. Therefore, the abatement benefits claimed under specific notifications were deemed inadmissible. However, the Tribunal noted that if the appellants could demonstrate compliance with the conditions of another notification, the benefit could be extended based on relevant legal precedents. The case was remanded to the original adjudicating authority for reconsideration of the appellants' claim under the specific notification.

The appeals were allowed for de novo adjudication, directing the recomputation of the demand after considering the benefit of the specific notification, subject to the appellants satisfying the conditions. Penalties were also to be recomputed accordingly. The miscellaneous applications for early hearing of appeals were disposed of with the resolution of the appeals.