2023 (7) TMI 1180 - AT - Service Tax

Benefit of abatement under N/N. 01/2006 - Commercial and Industrial Construction Service - Composite service or not - denial on the ground that the Agreement entered into between the appellant and their clients was for renovation and remodelling and was limited to the completion or finishing of the work - applicability of decision in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT - HELD THAT - The case of the appellants is squarely covered by the said judgment of the Hon ble Apex Court as it is not in dispute that the service rendered by the appellant is under a composite contract and it is also not denied that material was not the part of service. The Tribunal in M/S. RAJ FURNITURES VERSUS COMMISSIONER OF CENTRAL EXCISE ST, DELHI 2018 (5) TMI 1359 - CESTAT CHANDIGARH has already held that the appellants are not required to pay service tax on the services rendered by them either before or after 01.06.2007. Though, this decision has been rendered in respect of another branch of the appellant, facts of the case being identical, the ratio of the same requires to be followed. Thus, the appellants have rendered service under a composite contract and as such are not liable to pay service tax for the period before 01.06.2007; the demand for the subsequent period i.e. after 01.06.2007 cannot also be sustained having been raised under a wrong Head - there is no merit in the contention of the Department and the appellant s contention has considerable force. Appeal allowed.

Summary

Issues:
The issues involved in the judgment are the eligibility of the appellant for Notification No.01/2006, classification of services under "Commercial and Industrial Construction Service," applicability of Notification No.12/2003, time-barred show-cause notice, and imposition of penalty.

Eligibility for Notification No.01/2006:
The appellant, engaged in civil construction, had been availing abatement of 67%. The Revenue contended that the appellant was not eligible for Notification No.01/2006, leading to show-cause notices and a demand confirmed by the Original Authority. The Appellate Authority held that the appellant's work was limited to renovation and remodelling, thus denying abatement.

Classification of Services and Applicability of Notifications:
The appellant argued that their work involved composite non-vivisectable services, citing the usage of material and payment of VAT. They relied on legal precedents to support their claim. Additionally, they contended that even if classified under "Commercial and Industrial Construction Service," they were entitled to the benefit of Notification No.12/2003. The appellant also challenged the timeliness of the show-cause notice and the imposition of penalties, citing legal interpretations.

Judgment and Decision:
The Tribunal found that the appellant's services fell under a composite contract, aligning with the apex court's decision. The appellant was deemed not liable for service tax before or after 01.06.2007. The Tribunal emphasized that the demand for the subsequent period was raised under the wrong head. The appellant's argument regarding the rebate and duty payment was acknowledged, leading to the allowance of the appeal. The decision was pronounced on 27/07/2023.

This summary provides a detailed overview of the issues addressed in the judgment, including the arguments presented by both parties and the final decision rendered by the Tribunal.