2018 (8) TMI 1006 - AT - Service Tax

Classification of services - respondents are engaged in construction of doors, windows, partitions, etc., of commercial buildings and residential complexes or units as per the contracts - completion and finishing services in relation to Commercial or Industrial Construction Service and Construction of Residential Complex Service or otherwise? - Held that - CBEC vide letter F.No.B1/6/2005-TRU dated 27.7.2005 has clarified that post construction, completion and finishing services are specifically included in the definition of Commercial or Industrial Construction Service as the activity undertaken by respondents appears to be before the completion of the complex or buildings. For a final appreciation of the facts of the case and to classify the services rendered by the respondents under appropriate heading and to see the eligibility of abatement claimed by the respondents, it will be fair that the case should go back to the original adjudicating authority who will examine the claim of the respondent afresh in the light of the contracts, agreements, etc., the respondents had with their clients - appeal allowed by way of remand.

Issues:
1. Classification of services provided by the respondents under 'Commercial or Industrial Construction Service' and 'Construction of Residential Complex Service'.
2. Eligibility of the respondents for abatement under Notification No.15/2004-ST.
3. Interpretation of completion and finishing services in relation to construction activities.
4. Clarifications provided by CBEC regarding post-construction services.
5. Examination of contracts and agreements to determine the stage of services provided by the respondents.

Analysis:
1. The Department issued a show-cause notice alleging that the services provided by the respondents were under completion and finishing services in relation to 'Commercial or Industrial Construction Service' and 'Construction of Residential Complex Service'. The respondents argued that their services were integral parts of construction activities and should be classified under the mentioned categories. The Tribunal noted that the respondents were registered under these categories and were availing abatement under Notification No.15/2004-ST. The CBEC clarified that post-construction completion and finishing services are included in the definition of these services. The Tribunal decided to remand the case to the original adjudicating authority to examine the stage at which the services were provided by the respondents and determine the eligibility for abatement.

2. The respondents contended that their services were not post-construction completion and finishing services but integral parts of the construction activity. They referred to CBEC circulars confirming that certain services like glazing, plastering, painting, joinery, and carpentry are included in the construction activity. The Tribunal acknowledged the arguments and directed a re-examination of the case based on the contracts, agreements, and payments received by the respondents to ascertain the correct classification of their services.

3. The Tribunal considered the definitions of completion and finishing services in relation to construction activities. The respondents emphasized that their services were provided during the construction of walls and were integral to the building process. The CBEC circulars supported the inclusion of certain services as part of construction activities. The Tribunal found merit in the respondent's argument and decided to send the case back for a detailed examination of the facts to determine the appropriate classification and eligibility for abatement claimed by the respondents.

4. The respondents highlighted the CBEC circulars that specifically included post-construction completion and finishing services in the definition of commercial or industrial construction services. The Tribunal acknowledged the circulars and emphasized the need to consider these clarifications in determining the classification of the services provided by the respondents. The case was remanded for a thorough review of the contracts and agreements to ascertain the stage at which the services were rendered and the eligibility for abatement under the relevant notifications.

5. The Tribunal emphasized the importance of examining the contracts, agreements, and payments received by the respondents to determine the stage at which the services were provided. The case was remanded to the original adjudicating authority for a detailed analysis of the facts to classify the services under the appropriate category and assess the eligibility for abatement claimed by the respondents.

← Previous Next →