2018 (4) TMI 1326 - AT - Service Tax

Works contract service - abatement - Held that - the appellant-assessee is provider of works contract service but, during the relevant period, had been discharging the tax liability on the service component of commercial and industrial construction service - The issue of composite contracts has since been settled by the Hon ble Supreme Court in Commissioner of Central Excise, Kerala V. Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT . The appellant is also entitled to the benefit of the Works Contract Service (Composite Scheme for Payment of Service Tax Rules), 2007. Liability of appellant needs to be ascertained - appeal allowed by way of remand.

Summary

Issues:
1. Confirmation of demand for commercial and industrial service
2. Imposition of penalties under section 78 and section 77
3. Discharge of tax liability for goods transport agency service
4. Applicability of Works Contract Service (Composite Scheme for Payment of Service Tax Rules), 2007

Analysis:

1. The appeal challenged the order confirming a demand of &8377; 41,32,114.00 for providing 'commercial and industrial service.' The adjudicating authority also imposed penalties under section 78 and section 77. The appellant contended that they were in the business of manufacturing pre-stressed concrete slabs and pillars used in 'erection, commissioning, and installation' of plants. The demand was related to the period from October 2007 to December 2012. The appellant argued that they were discharging tax liability as a provider of 'works contract service' during the relevant period, as clarified by the Supreme Court in a previous judgment.

2. The Learned Authorised Representative argued that the appellant was a provider of finishing service, not eligible for abatement, and liable to discharge tax liability from June 1, 2007, as a provider of 'works contract service.' The Tribunal noted that the issue of composite contracts had been settled by the Supreme Court in a previous case. The appellant was found to be entitled to the benefit of the Works Contract Service (Composite Scheme for Payment of Service Tax Rules), 2007. However, the adjudicating authority had not examined the appellant's claim regarding the 'goods transport agency' service during the proceedings.

3. Considering the above, the Tribunal set aside the impugned order and remanded the matter to the original authority for a fresh ascertainment on the limited grounds of applicability of Works Contract Service rules and the claim for 'goods transport agency' service. The appeals were disposed of by way of remand, allowing for further examination and decision by the original authority based on the terms specified in the judgment.