2019 (4) TMI 1960 - AT - Service Tax

Completion and Finishing Service - Commercial or Industrial Construction Service or not - non availment of abatement under Notification No. 1/2006-ST dated 01.03.2006 - issue of interpretation of law - extended period of limitation - penalty - HELD THAT - N/N. 01/2006-ST dated 01.03.2006 also clearly explained that the exemption under the said notification shall not apply to the Completion and Finishing Service in relation to building of civil structure. This notification shall not apply in cases where, - (i) the CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has been taken under the provisions of the CENVAT Credit Rules, 2004; or (ii) the service provider has availed the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2003-Service Tax, dated the 20th June, 2003 G.S.R. 503 (E), dated the 20th June, 2003 . Extended period limitation - penalty - HELD THAT - The appellant cannot take the benefit on the ground that it is an issue of interpretation of law. Therefore, the extended period of limitation is rightly invoked. Accordingly, the demand of service tax is correctly confirmed and penalty is rightly imposed. Appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against confirmed demand of service tax by denying abatement under Notification No. 01/2006-ST for the period 2005-06 to 2009-2010.

Analysis:
The appellant, engaged in 'Commercial or Industrial Construction Service' and 'Works Contract Service', availed abatement under Notification No. 1/2006-ST dated 01.03.2006. However, it was found during audit that the appellant provided 'Completion and Finishing Service' which was not eligible for abatement under the said notification. Consequently, a show cause notice was issued, and the demand of service tax was confirmed by denying the abatement and imposing penalties. The appellant contended that the demand for the extended period should be dropped as it was an issue of interpretation of law and penalties should not be imposed.

The Tribunal noted that the services provided by the appellant fell under 'Commercial or Industrial Construction Service' as per Section 65 (25 b) of the Finance Act, 1944. The Notification 01/2006-ST dated 01.03.2006 clearly stated that the exemption did not apply to 'Completion and Finishing Service in relation to building of civil structure'. The law was unambiguous, and the appellant could not claim benefit based on an interpretation issue. Therefore, the extended period of limitation was rightly invoked, and the demand of service tax was correctly confirmed along with the imposition of penalties.

In light of the clear legal provisions, the Tribunal found no error in the impugned order and dismissed the appeal, confirming the demand of service tax and penalties.