2018 (5) TMI 1793 - AT - Service Tax

Non-payment of Service Tax - Commercial and industrial construction service - composite contract or not - N/N. 15/2004 dated 10.9.2004 read with N/N. 1/2006 dated 1.3.2006 - Held that - In the work order, there is no reference of any material, which should be supplied by the appellant. Further, it is found from the ledger account annexed in the appeal memorandum that the appellant had received its payment for providing the job work charges only and there is no reference of any material component. Since, there is no documentary evidence available in the case records to show that for execution of the assigned job, the appellant had also used the material, the benefit of abatement provided under notification dated 10.9.204 read with notification dated 1.3.2006 should not be available to the appellant. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Appellant's liability for service tax on commercial and industrial construction services provided.
2. Applicability of abatement benefit under specific notifications for material component supplied.
3. Interpretation of work order scope and absence of mention of material supply.

Analysis:
1. The appellant, a provider of commercial and industrial construction services, was found liable for not paying service tax as per Section 65(105)(zzq) of the Finance Act, 1994 for services provided during 2008-2009. The department initiated proceedings resulting in the confirmation of service tax demand.

2. The appellant claimed the benefit of abatement on the material component supplied for the assigned job under Notification No. 15/2004 dated 10.9.2004 read with Notification No. 1/2006 dated 1.3.2006. The appellant argued that the contract with M/s Sharma Constructions was composite, involving affixing electric points and material supply.

3. The Revenue, however, contended that the work order issued by M/s Sharma Constructions clearly outlined the scope of work as limited to job execution without any mention of material supply by the appellant. The Tribunal examined the work order and ledger account, finding no evidence of material usage by the appellant for the assigned job. Consequently, the Tribunal held that the appellant was not entitled to the abatement benefit under the relevant notifications due to the absence of documented material supply.

In conclusion, the Tribunal dismissed the appeal, upholding the impugned order and denying the appellant's claim for abatement benefit on the material component supplied. The decision was based on the specific terms of the work order and the lack of evidence supporting the appellant's assertion of material usage, highlighting the importance of clear contractual terms and documented evidence in tax matters.