2018 (12) TMI 434 - AT - Service Tax

Benefit of abatement - construction of residential complex - denial of abatement on the ground that activity of the appellant is in the nature of completion and finishing services - Held that - The period involved in the present case is April, 2005 to September, 2007. The issue of work contract was not considered by the lower authority. Since the lower authority had no occasion to deal with this vital issue matter needs to be reconsidered - appeal allowed by way of remand.

Summary

Issues involved:
1. Eligibility for abatement under notification no. 01/2006-ST for services provided in construction of residential complex.

Analysis:
The case involved a dispute regarding the eligibility of the appellant for abatement under notification no. 01/2006-ST for services provided in the construction of a residential complex. The appellant claimed abatement of 67% on the gross value under the said notification. The department contended that the appellant's activity was in the nature of completion and finishing services, making it ineligible for abatement. The Adjudicating Authority initially dropped the demand, but the Revisionary Commissioner set aside the order and confirmed the demand, leading to the present appeal.

The appellant argued that the contract was of a composite nature as they provided services along with material, falling under the category of a work contract. They claimed that the services provided were not completion or finishing services but rather new construction, making them eligible for abatement. On the other hand, the Revenue representative reiterated that the appellant was indeed carrying out finishing and completion services, such as plastering and wall covering on the already done RCC work, which fell under completion and finishing work excluded from the exemption notification 01/2006.

Upon careful consideration, the Tribunal noted that the period involved in the case was from April 2005 to September 2007. It was observed that the issue of work contract was not adequately addressed by the lower authority. Referring to the Supreme Court judgment in the case of Commissioner Of C. Ex. & Cus., Kerala Vs. Larsen & Toubro Ltd., it was highlighted that works contract service was not taxable before 01/06/2007. As the lower authority did not address this crucial issue, the Tribunal decided to set aside the impugned order and remand the matter to the original authority for a fresh decision based on the Supreme Court's judgment in the case of L&T Ltd.