2017 (8) TMI 1174 - AT - Service Tax

Works Contract Service - The allegation of the department is that the appellant has not paid service tax for the period April 2008 to March, 2009 on the Works Contract service - Held that - The appellant has performed a contract on the basis of Works Contract which was brought under the service tax net w.e.f. 01.06.2007, no prior clarification is applicable in the instant case. The Commissioner has already given partial relief to the appellant. In the peculiar facts and circumstances of the case, there is no further scope to provide any relief - Appeal dismissed - decided against appellant.

Summary

Issues:
Service tax liability on works contract service for government buildings and residences.

Analysis:
The appeal was filed against an order-in-appeal passed by the Commissioner (Appeals), Customs & Central Excise, Meerut-I. The appellant, engaged in providing spray plaster/paint job services for government and industrial institutions, was registered under 'Works Contract Service' but faced allegations of not paying service tax for the period April 2008 to March 2009. The appellant contended that no service tax was applicable on services provided to government buildings based on a Board Circular. The Revenue argued that services came under the service tax net from June 1, 2007, and hence, the circular from 2004 was not applicable. The impugned order showed that the appellant had paid service tax for a different entity but claimed exemption for government buildings. The Tribunal noted that Section 65 of the Finance Act, 1994 did not provide specific exemption to the appellant for government buildings. Although certain categories were exempt, works contracts were brought under the service tax net from June 1, 2007, rendering prior clarifications irrelevant. The Commissioner had already granted partial relief, and based on the circumstances, no further relief was warranted. Consequently, the Tribunal upheld the impugned order and dismissed the appeal.

This case revolved around the interpretation of Section 65 of the Finance Act, 1994 concerning the applicability of service tax on works contract services provided to government buildings and residences. The appellant argued for exemption based on a Board Circular from 2004, stating that government constructions were generally not taxable. However, the Revenue contended that services were taxable from June 1, 2007, making the circular inapplicable. The Tribunal analyzed the facts and determined that while certain categories were exempt, works contracts were taxable post-June 1, 2007. The Commissioner had already provided partial relief, and considering the circumstances, the Tribunal found no grounds for further relief. Therefore, the impugned order was upheld, and the appeal was dismissed.