2023 (9) TMI 1426 - AT - Service Tax

Classification of service - Commercial or Industrial Construction Service or not - contract with M/s. Indian Oil Corporation Ltd. for construction of Dykes Internal Roads and other civil miscellaneous works at the marketing terminals - period from July 2006 to March 2007 - HELD THAT - This very Bench in the assessee s own case in Final Order No. 41989 of 2017 dated 07.09.2017 had occasion to analyse an identical issue wherein this Bench having observed thus After hearing both sides we find that the period involved in the case is from September 2004 to June 2006. That the issue being a works contract whether subject to service tax prior to 1.6.2007 has been settled by the judgment of the Hon ble Supreme Court in the case of COMMISSIONER CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT . We also note that the coordinate Bench in the case of M/S C.C.L. PRODUCTS (INDIA) LTD. VERSUS THE COMMISSIONER. C.C. E ST GUNTUR 2016 (10) TMI 832 - CESTAT HYDERABAD in a similar matter had set aside the demand relying upon the judgment of the Hon ble Supreme Court on identical set of facts. There are no change in the facts nor has the Revenue made out any case to suggest that the service rendered by the appellant was not under works contract and hence there are no justifiable reasons to deviate from the view expressed by this Bench in the appellant s own case for a different period. There is no liability to pay tax under Commercial or Industrial Construction Service during the period under dispute which is prior to 01.06.2007 for which reason the impugned order deserves to be set aside - The appeal stands allowed.

Summary

Issues involved:
The issues involved in the judgment are whether the service provided falls under "Commercial or Industrial Construction Service" as per the Finance Act, 1994, and if the appellant is liable to pay Service Tax for the period prior to 01.06.2007.

Issue 1 - Classification of service under "Commercial or Industrial Construction Service":
The appellant had undertaken construction work for M/s. Indian Oil Corporation Ltd., and received payment for the same. The Revenue contended that this service fell under "Commercial or Industrial Construction Service" and was chargeable to Service Tax. A Show Cause Notice was issued proposing a demand for Service Tax, interest, and penalties. The lower authorities confirmed the demand.

Issue 2 - Liability to pay Service Tax for the period prior to 01.06.2007:
The appellant argued that the issue pertained to the period before 01.06.2007 and cited judicial precedents to support their case. They relied on a previous order by the CESTAT in a similar matter involving the same appellant, where it was held that the service rendered was under a works contract and not liable for Service Tax prior to 01.06.2007. The appellant contended that there was no justification to deviate from this view.

In the judgment, the Tribunal noted that a previous order by the same Bench had analyzed a similar issue involving the appellant. The Tribunal observed that the issue revolved around whether the works contract was subject to Service Tax before 01.06.2007. Citing a Supreme Court judgment and a decision by a coordinate Bench, the Tribunal concluded that there was no liability to pay tax under "Commercial or Industrial Construction Service" for the period in question.

The Tribunal found no change in the facts presented and concluded that the service provided by the appellant was indeed under a works contract. Therefore, the Tribunal held that there was no liability to pay tax under "Commercial or Industrial Construction Service" for the period prior to 01.06.2007. As a result, the impugned order demanding Service Tax, interest, and penalties was set aside, and the appeal was allowed with consequential benefits, if any, as per law.