9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 12 - AT - Service TaxValuation - Commercial or Industrial Construction Service - Construction of Complex Service - inclusion of monetary value of free materials supplied by their client in the gross amount for the payment of service tax - Composite contract - HELD THAT - For the period after 01.06.2007, the Chennai Bench of the CESTAT in the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2018 (9) TMI 1149 - CESTAT CHENNAI have extrapolated the ratio laid down by the Hon ble Apex Court in COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT and held that even after 01.06.2007, service tax liability for composite contracts can only be demanded under Works Contract Service and not under CICS etc. The impugned order demanding the amount of tax liability under CICS for a composite contract will not survive and will require to be set aside - appeal allowed - decided in favor of appellant.
Issues:
1. Service tax liability for a composite contract involving provision of service and transfer of property in goods. 2. Applicability of CICS and RCS for such composite contracts. 3. Validity of penalties imposed under various provisions of law. Analysis: Issue 1: Service tax liability for a composite contract involving provision of service and transfer of property in goods The case involved M/s. Voora Shreeram Construction Pvt. Ltd., registered for providing services under "Commercial or Industrial Construction Service" and "Construction of Complex Service." The appellant failed to discharge their service tax liability for a specific period and did not include the value of free materials supplied by their client in the gross amount for service tax payment. A show cause notice was issued proposing a substantial demand of service tax with interest and penalties. The adjudicating authority confirmed the demand and imposed penalties. The appellant challenged this decision through an appeal. Issue 2: Applicability of CICS and RCS for composite contracts During the hearing, the appellant's advocate relied on legal precedents, including a Supreme Court judgment and a recent decision by the Bench, to argue that a composite contract involving service provision and transfer of goods should be covered under Works Contract Service rather than under CICS and RCS. The Bench agreed with the appellant's argument, citing the Supreme Court decision for the period up to a specific date and a Chennai Bench decision for the period thereafter. It was held that service tax liability for composite contracts should be demanded under Works Contract Service even after a certain date, and not under CICS or similar categories. Issue 3: Validity of penalties imposed under various provisions of law After considering both sides and reviewing the records, the Bench found merit in the appellant's argument based on the cited case laws. Consequently, the impugned order demanding tax liability under CICS for a composite contract was set aside. The appeal was allowed with consequential benefits, if any, as per the law. In conclusion, the judgment clarified the service tax liability for composite contracts involving service provision and transfer of goods, emphasizing the applicability of Works Contract Service over other categories. The decision also highlighted the importance of legal precedents in determining tax liabilities and penalties in such cases.
|
