2018 (10) TMI 701 - AT - Service Tax

Abatement - N/N. 1/2006-ST - Industrial or Commercial Construction Services - denial of abatement on the ground that the service recipient has provided free of cost material in the shape of cement and iron - Held that - Inasmuch as that the flats constructed by them were not meant for any commercial activity, but the same were for residential purposes of the employees of M/s.Guleria Chini Mills, the same would get covered by the exclusion clause of the definition of Construction of Residential Complex - These issues were raised before the original adjudicating authority, there is no finding on the same. Matter remanded to original adjudicating authority for de novo adjudication - appeal allowed by way of remand.

Summary

Issues:
1. Service Tax demand under "Industrial or Commercial Construction Services" category without extending abatement benefit.
2. Classification of construction activity under "Commercial or Industrial Construction" or "Construction of Residential Complex".
3. Lack of finding on the residential purpose of the construction activity.

Analysis:
1. The Appellate Tribunal found that the Service Tax demand was confirmed against the appellant under the category of "Industrial or Commercial Construction Services" without extending the benefit of abatement. The appellant's reliance on a larger Bench decision was not considered as the appellate authority distinguished the case and did not follow it. The reason for denying abatement was that the service recipient provided material free of cost, such as cement and iron.

2. The appellants argued that the construction activity was for building residential flats for the employees of a specific company, which should be classified under "Construction of Residential Complex" rather than "Commercial or Industrial Construction." However, the original adjudicating authority did not provide any finding on this issue. Therefore, the Tribunal set aside the orders and remanded the matter for fresh adjudication, instructing the authority to consider and give a finding on each submission made by the appellant.

3. In light of the submissions, the Tribunal emphasized that if the construction activity is considered "Commercial or Industrial Construction," the appellant's duty liability should be judged according to the law declared by a larger Bench in a specific case. The matter was remanded to the original adjudicating authority for further examination, without expressing any opinion on the case's merits. The Tribunal ensured that the appellant would be given an opportunity to present their case during the fresh adjudication process.