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2018 (5) TMI 1422 - AT - Service TaxClassification of services - Works Contract Services or Erection, Commissioning or Installation Service? - certain contracts executed by the appellant for M/s Hindustan Petroleum Corporation - the Department was of the view that the activity carried out is in the nature of installation of tanks, pumps and related jobs - Held that - the appellant has claimed that the activities are covered under the definition of Works Contract Services . Further it is seen that during the period 2007-08 and 2008-09, the appellant has already paid Service Tax under the category of Works Contract Services but the Revenue has sought to demand differential duty for this period by denying the abatement available under the category of Works Contract Services . The Hon ble Supreme Court in the case of Larsen & Toubro 2015 (8) TMI 749 - SUPREME COURT has categorically held that Works Contract Service is a different category of service and activity falling under WCS were not liable to Service Tax prior to 01/06/2007 - demand of Service Tax for the period prior to 01/06/2007 is set aside. For the period w.e.f. 01/06/2007 the activity will be liable to Service Tax under WCS. It is further seen that the appellant also discharged the Service tax under the category of WCS for the said period, but the Revenue has denied the abatement under WCS - the appellant will be entitled to the abatement as available to WCS. Appeal allowed - decided in favor of appellant.
Issues:
Classification of service under Works Contract Service, Demand of Service Tax for the period prior to 01/06/2007, Denial of abatement under Works Contract Service for the period w.e.f. 01/06/2007. Analysis: The appeal was filed against the Order-in-Appeal No. 182/2012 dated 05/09/2012 concerning the classification of services provided by the appellant for M/s Hindustan Petroleum Corporation. The Department proposed a demand for Service Tax under the category of 'Erection, Commissioning or Installation Service.' The appellant contended that the activity falls under Works Contract Services, citing the decision of the Hon'ble Supreme Court in the case of Larsen & Toubro Ltd. The appellant argued that for the period prior to 01/06/2007, the service would not be liable to Service Tax under Works Contract Service and that for the period after 01/06/2007, the Department demanded Service Tax without allowing the benefit of abatement available under Works Contract Service. During the hearing, the Department justified the order but acknowledged that the service should be classified under Works Contract Service based on the Supreme Court's decision. However, it highlighted the appellant's failure to register until 2009 and the Department's lack of awareness of the services provided to M/s HPCL. The Tribunal noted that the appellant had performed various activities for M/s HPCL, including civil construction, site preparation, and pump installation. The demand covered the period from 2004-05 to Feb 2010, with the proposed classification under "Erection, Commissioning or Installation Service." The Tribunal referred to the Supreme Court's decision in Larsen & Toubro, stating that Works Contract Service is a distinct category not liable to Service Tax before 01/06/2007. Following the decision in a similar case, the Tribunal concluded that the activity in question falls under Works Contract Service. The demand for Service Tax for the period before 01/06/2007 was set aside. However, for the period from 01/06/2007, the activity was deemed liable to Service Tax under Works Contract Service, and the appellant was entitled to the abatement available under this category. The Tribunal set aside the impugned order and allowed the appeal, pronouncing the decision on 23/05/2018.
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