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2023 (7) TMI 58 - AT - Service TaxLevy of Service Tax - Work Contract Service - contracts executed involving both supply of goods and services - period 01.04.2005 to 31.03.2007 - HELD THAT - The Appellant has executed the construction work of (i) Garment Park for West Bengal Industrial Development Corporation Ltd, (ii) Malda Food Park for West Bengal Processing and Horticulture Development Corporation and (iii) Ash Handling System for DC Industrial Plant Services Ltd., during the period 01.04.2005 to 31.03.2007. It is observed that Work Contract Service was liable to service tax only w.e.f. 01.06.2007. Prior to this date no service tax was liable to be paid on Work Contract service - the issue has already settled by the Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT - In this judgment, the Hon ble Supreme Court has categorically held that Work Contract Services involving both supply of goods and service , were liable to service tax only w.e.f.01.06.2007. Prior to 01.06.2207, such services cannot be charged to service tax under any other category of taxable service, namely Commercial or Industrial Construction Service. As the demand involved in the impugned order pertains to the period prior to 01.07.2016, the demand of service tax confirmed under the category of Commercial and Industrial Construction Service is not sustainable - demand set aside. Appeal allowed.
Issues involved:
The issues involved in the judgment are the demand of Service Tax under the category of 'Commercial or Industrial Construction Service' for construction work executed during a specific period, classification of services as 'Work Contract' service, applicability of service tax prior to a specified date, and the settlement of the issue by the Supreme Court in a related case. Summary: The Appellant, M/s Ramky Infrastructure Ltd., received a Show Cause Notice proposing a demand for Service Tax under the category of 'Commercial or Industrial Construction Service' for projects executed during a certain period. The Commissioner confirmed the demand, including interest and penalty. The Appellant contended that the services provided were classifiable as 'Work Contract' service, not liable for service tax during the relevant period, citing a Supreme Court judgment. The Appellant argued that the demand was not sustainable based on the settled issue. The Authorized Representative supported the adjudicating authority's findings. After hearing both sides, the Tribunal observed that the services rendered were indeed 'Work Contract' services, not subject to service tax before a specified date. Referring to the Supreme Court judgment, the Tribunal held that the demand under 'Commercial and Industrial Construction Service' was not sustainable for the period in question, thus setting aside the demand and allowing the appeal. (Order pronounced in the open court on 28 June 2023.)
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