2023 (9) TMI 183 - AT - Service Tax

Levy of service tax - Commercial or Industrial Construction Service - works contract service or not - providing of service of civil construction to different Government Organisation/PSU - HELD THAT - In this case, it is not in dispute that the appellant is providing the services along with materials. Therefore, the merits classification of the above services under Works Contract Service and no demand is raised against the appellant under Works Contract Service . Therefore, following the decision of the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT , wherein the Hon ble Apex Court has held Works contract were not chargeable to service tax prior to 1.6.2007. The classification of the impugned service is under Works Contract Service and no demand has been made under Works Contract Service as per the show-cause notice. Therefore, till 30.06.2012, the appellant is not liable to pay any service tax. For the post 30.06.2012, the appellant has paid the service tax in respect of service to BSNL not contesting the same. The adjudicating authority in the impugned order has observed that the certificate issued by Executive Engineer, NPWD (Nagaland Public Works Department), Kohima cannot be accepted as the proof that the said building is not for use for any commercial consideration - It is very strange that the adjudicating authority has not accepted the said Certificate by only saying that the said Certificate cannot be accepted, but did not explain what other documents are required for consideration to find out the activity of construction, the said Guest House is taxable or not? The said Guest House constructed by the appellant for CIDCO, is not liable for service tax as the same is not used for commercial and industrial use. Therefore, the demand with reference to the said Guest House is also set aside - the appellant has admitted the service tax liability with reference to construction services provided to BSNL/Port w.e.f.30.06.2012 and paid the service tax thereon, the same demand is confirmed and rest of the demand confirmed under the impugned order, is set aside. Penalty - HELD THAT - No penalty is imposable on the appellant. Therefore, the penalty imposed on the appellant is set aside. Appeal allowed in part.

Summary

Issues Involved:
1. Classification of services provided by the appellant.
2. Validity of the show-cause notice.
3. Applicability of service tax on specific constructions.
4. Invocation of the extended period of limitation.
5. Imposition of penalties.

Summary:

1. Classification of Services Provided by the Appellant:
The appellant provided services along with materials, which merits classification under "Works Contract Service." The demand was confirmed under "Commercial or Industrial Construction Services," which is beyond the show-cause notice. Following the decision of the Hon'ble Apex Court in Larsen & Toubro Limited, the Tribunal held that the appellant is not liable to pay service tax under "Commercial or Industrial Construction Services" till 30.06.2012.

2. Validity of the Show-Cause Notice:
The appellant argued that the show-cause notice was vague and void ab initio. The demand was calculated for services provided to multiple entities, but the notice specifically mentioned CIDCO Ltd. and BSNL. The Tribunal found the show-cause notice to be inconsistent with the actual demand, supporting the appellant's contention.

3. Applicability of Service Tax on Specific Constructions:
- Assam State Co-operative Housing Federation Limited: The construction was for official use by the Government for civic amenities, not subject to service tax.
- BSNL: The building was for training purposes, not for commercial or industrial use.
- RITES Limited: The construction of Radar-Cum-Antenna building at the airport is excluded from service tax under Section 65(105)(zzzza) of the Finance Act, 2004.
- Nagaland through CIDCO: The Guest House was for public welfare, not for commercial use. The Tribunal rejected the adjudicating authority's dismissal of the Executive Engineer's certificate.
- Assam Tourism Development Corporation Limited: The construction was for tourist amenities, not for profit, thus not taxable.

4. Invocation of the Extended Period of Limitation:
The appellant registered with the Department on 15.03.2007 and filed returns regularly. The show-cause notice issued on 21.07.2014 was deemed highly barred by limitation, as the appellant had already paid service tax for NEDFI in 2012.

5. Imposition of Penalties:
Given that the appellant had admitted and paid the service tax for BSNL/Port services post 30.06.2012, the Tribunal confirmed this part of the demand. However, the rest of the demand was set aside, and no penalty was imposed on the appellant.

Conclusion:
The appeal was allowed by modifying the impugned order, confirming the demand for BSNL/Port services post 30.06.2012, and setting aside the rest of the demand and penalties.