2018 (6) TMI 1361 - AT - Service Tax

Construction Services - demand of Service tax - for the period 10.09.2004 to 16.06.2005, under Construction services, and the period 16.06.2005 to 30.09.2008 under Commercial or Industrial construction Services - for the period 01.04.2008 to 30.09.2008, under Works Contract - Held that - The payment upto 01.06.2007 will get extinguished on account of the law that has been laid down by the Apex Court in the case of Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT - The demand confirmed in the impugned order under these categories namely under construction service for the period 10.09.2004 to 16.06.2005 under CICS for the period 16.06.2005 to 30.09.2008 cannot also sustain and are therefore set aside. For the period 01.04.2008 to 30.09.2008, the demand confirmed is ₹ 26,88,611/- - Held that - The appellant has not contested the liability under works contract for this period - the demand of ₹ 26,88,611/- under works contract service for the period 01.04.2008 to 30.09.2008 is required to be considered as having been paid, albeit subsequent to the visit of the officers - however, the interest liability if any will have to be discharged. Penalties - Held that - It is also only on 1.04.2008, that the registration certificate had been amended to include works contract service as per the request of the appellant. This being so, and also considering the fact that the issue per se was also mired in litigation and reached finality only after the Hon ble Apex Court judgement in L& T 2015 (8) TMI 749 - SUPREME COURT , it can be concluded that there cannot be any penalty imposed in the impugned order and therefore set aside the same. Appeal allowed in part.

Summary

Issues: Service tax liability for construction activities, demand under various categories, penalty imposition, applicability of judgments.

Analysis:

1. Service Tax Liability: The appellants were involved in construction activities and faced a service tax liability issue. The department issued a show-cause notice proposing demands under different categories for various periods. The adjudicating authority confirmed a significant amount as tax liability along with penalties.

2. Applicability of Judgments: The appellant's counsel relied on a Supreme Court judgment in the case of CCE Vs. Larsen & Toubro Ltd. to argue that there was no tax liability until a certain date. The counsel contended that the demand under construction services and other categories could not be sustained post a specific period.

3. Demand Confirmation: The tribunal analyzed the arguments presented by both sides. It noted that the demand for certain periods and categories could not be sustained based on the nature of the services provided. The tribunal set aside the demands under construction services and CICS for specific periods.

4. Penalty Imposition: Regarding penalties imposed on the appellants, the tribunal considered the communication with the department, registration details, and the ongoing litigation. It concluded that penalties could not be upheld and hence set them aside.

5. Interest Liability: The tribunal also addressed the issue of interest liability on the amount demanded under works contract service for a specific period. It ruled that the demand amount was considered paid, subject to the discharge of any interest liability that may arise.

6. Miscellaneous Application: A miscellaneous application for a change in the cause title of the respondent was filed due to jurisdiction and address changes. The tribunal allowed the application and updated the jurisdiction and address details accordingly.

In conclusion, the tribunal made detailed observations on the service tax liability, demand confirmation, penalty imposition, and interest liability in the case related to construction activities. It considered legal judgments, arguments presented, and relevant communication with the department to arrive at the final decision, setting aside certain demands and penalties while addressing the interest liability issue.