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2019 (6) TMI 1204 - AT - Service TaxErection, Commissioning and Installation Services - it is alleged that the appellants have intentionally vivisected the contract into material and labour portions in order to evade payment of Service tax - demand of service tax - HELD THAT - For the period prior to 01.06.2007, the demand of Service Tax for such composite contracts cannot sustain as per the decision of the Hon ble Supreme Court in the case of M/s. Larsen Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT . For the period post 01.06.2007, it is seen that though the demand is made in the Show Cause Notice under Erection, Commissioning and Installation Service and the adjudicating authority has also confirmed the demand under Erection, Commissioning and Installation Service. However, the Commissioner (Appeals) has travelled beyond the Show Cause Notice to confirm the demand under Works Contract Service - Furthermore, in the decision of M/s. Real Value Promoters Ltd. 2018 (9) TMI 1149 - CESTAT CHENNAI , the Tribunal has held that the demand of Service Tax under Erection, Commissioning and Installation Services cannot sustain for composite contracts for the period post 01.06.2007 - Thus the demand of Service Tax under Erection, Commissioning and Installation Services/Works Contract Services cannot sustain and requires to be set aside. Co-consultancy Services - it is alleged that the appellant has not paid the Service Tax for the services rendered as Co-Consultant to the Principal Consultant viz., M/s. Jayaram Consultancy - Extended period of limitation - HELD THAT - The issue being an interpretational one as also being mired in litigations during the relevant period, the allegation that the appellant has suppressed facts with intention to evade payment of Service Tax cannot sustain and requires to be set aside - the demand under Co-consultancy Services is barred by limitation and is set aside. Appeal allowed - decided in favor of appellant.
Issues:
1. Demand of Service Tax on Erection, Commissioning, and Installation Services and Works Contract Service. 2. Demand of Service Tax on Co-consultancy Services. Analysis: Issue 1: Demand of Service Tax on Erection, Commissioning, and Installation Services and Works Contract Service: The appellants were registered under various categories with the Service Tax Department. A Show Cause Notice was issued proposing a demand of Service Tax for not paying on Co-consultancy Services and short payment on Erection, Commissioning, and Installation Services. The Original Authority confirmed the Service Tax, interest, and penalty. The Commissioner (Appeals) upheld the demand on Co-consultancy Services and Works Contract Service. The appellant contended that the demand under Works Contract Service was beyond the Show Cause Notice. The Tribunal held that for composite contracts, the demand of Service Tax under Erection, Commissioning, and Installation Services/Works Contract Services cannot sustain and set it aside. Issue 2: Demand of Service Tax on Co-consultancy Services: The appellant argued they were not liable to pay Service Tax as the main service provider discharged it. The Department clarified the liability of sub-contractors to pay Service Tax. The Tribunal noted conflicting decisions during the relevant period and held that the demand under Co-consultancy Services was interpretational and barred by limitation. It set aside the demand. The Tribunal allowed the appeal, setting aside the impugned order and holding that the demands under both issues cannot sustain. The decision was pronounced on 24.06.2019.
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