2018 (9) TMI 1444 - AT - Service Tax

Classification of Services - construction of Petrol Pumps including the Canopies - whether taxable under Commercial or Industrial Construction Service or under Works Contract Service? - Held that - The services provided by the appellant having been held as falling under the category of Works Contract - matter remanded to Original Adjudicating Authority for re-quantification of the tax liability in accordance with law - appeal allowed by way of remand.

Summary

Issues:
1. Classification of services provided by the appellant as "Commercial or Industrial Construction Service" or "Works Contract."
2. Liability to pay service tax for the period prior to and after 01/06/2007.
3. Quantification of tax liability for the services provided by the appellant.

Analysis:
1. The judgment revolves around the classification of services provided by the appellant, who was engaged in the construction of Petrol Pumps including Canopies. The Revenue contended that the activity amounted to providing services under the category of "Commercial or Industrial Construction Service," leading to demands and penalties. The Commissioner (Appeals) accepted the assessee's stance that the activity fell under the category of "Works Contract," introduced in the statute from 01/06/2007. This decision resulted in dropping the demand for the period before 01/06/2007, which the Revenue appealed against, while confirming the demand for the subsequent period, leading the assessee to appeal.

2. In addressing the Revenue's appeal, the Tribunal referred to the settled issue based on the Supreme Court decision in the case of Commissioner of Central Excise & Customs, Kerala vs. Larsen & Toubro Ltd. 2015, where it was held against the Revenue. Consequently, the Tribunal rejected the Revenue's appeal, citing the precedent and the settled nature of the issue. This decision was made based on legal principles and established judicial interpretations.

3. Concerning the assessee's appeal, the Tribunal acknowledged the services provided as falling under the category of "Works Contract." The Chartered Accountant representing the assessee argued for the quantification of tax liability in accordance with the nature of the services, suggesting options such as allowing abatement of 67%, excluding the cost of material as per Rule 2(a), or applying the rate available under the composition scheme. The Tribunal accepted this argument, setting aside the impugned order confirming demands against the assessee and remanding the matter to the Original Adjudicating Authority for re-quantification of the tax liability as per the legal provisions. This decision aimed at ensuring a fair assessment of the tax liability based on the nature of the services provided by the appellant.

In conclusion, the judgment provides a detailed analysis of the issues related to the classification of services, liability to pay service tax, and quantification of tax liability, offering a balanced approach by considering legal precedents and statutory provisions to reach a fair and just decision in the matter.