2018 (4) TMI 906 - AT - Service Tax

Classification of service - activities involved civil construction, site preparation, road work, pump installation, piping, soil work etc. for their petrol pump retail outlets - whether classifiable under Works Contract Service or under Erection, Commissioning or Installation service? - Held that - M/s. HPCL deducted works contract tax (WCT) from the bills raised by the appellant. Since the activities undertaken by the appellant involves both the execution of the job and for supply of goods, the same appropriately falls under the taxable category of Works Contract service . Reliance placed in the case of Commissioner, Central Excise & Customs Versus M/s Larsen & Toubro Ltd. and others 2015 (8) TMI 749 - SUPREME COURT . Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of services under Service Tax - Works Contract Service vs. Erection, Commissioning or Installation of Plant and Machinery and Equipment Service

Analysis:

Issue 1: Classification of services under Service Tax - Works Contract Service vs. Erection, Commissioning or Installation of Plant and Machinery and Equipment Service

The case involved a dispute regarding the classification of services provided by the appellant to M/s. HPCL during a specific period. The appellant had initially registered under the category of "Commercial or Industrial Construction Service" and later under "Works Contract Service" upon its introduction. The Department contended that the services should be classified under "Erection, Commissioning or Installation of Plant and Machinery and Equipment Service" for the period 01.10.2004 to 31.03.2009. However, both parties agreed that M/s. HPCL had deducted works contract tax (WCT) from the bills raised by the appellant. The Tribunal, after considering the activities undertaken by the appellant involving both execution of the job and supply of goods, referred to a Supreme Court judgment (Larsen & Tubero Ltd. - 2015) to determine that the services provided by the appellant fell under the category of "Works Contract Service." The Tribunal concluded that the services could not be classified or taxed under any other category, thereby setting aside the Service Tax demand under the category of "Erection, Commissioning or Installation of Plant, Machinery and Equipment Service" and ruling in favor of the appellant.

In conclusion, the Tribunal found no merit in the impugned order confirming the Service Tax demand under the category of "Erection, Commissioning or Installation of Plant, Machinery and Equipment Service." By applying the legal precedent and principles related to works contract services, the Tribunal allowed the appeal in favor of the appellant, highlighting the correct classification of the services provided and emphasizing the exclusive applicability of the works contract service category for taxation purposes.

This analysis provides a detailed overview of the legal judgment, focusing on the issues related to the classification of services under Service Tax and the Tribunal's decision based on the arguments presented by both parties and relevant legal principles.