2024 (1) TMI 250 - AT - Service Tax

Levy of Service Tax - Construction of Complex Service - service provided to GSPHCL - service provided to Municipal Corporation and Nagarpalika under the JNNURM Scheme - Commercial or Industrial Construction Service or not - service by way of construction of compounding wall for BECL - facts not verified properly - violation of principles of natural justice. HELD THAT - The levy of service tax under the construction must be based on the terms of the contract. Therefore, to arrive at a final conclusion of levy of service tax, on the services in question the terms of the contract vis-a-vis the judgements delivered which were relied upon by appellant needs to be considered. However the adjudicating authority has not properly examined the facts/ terms of the contract and he has not seen the light of the judgements given subsequently on the identical issue. Therefore, the entire matter needs a relook and to be decided a fresh. The appeal is allowed by way of remand to the adjudicating authority for passing a fresh order.

Summary

Issues involved:
- Whether services provided by the Appellant to GSPHCL becomes taxable under the category of 'Construction of Complex Service'?
- Whether services provided by the Appellant to Municipal Corporation and Nagarpalika under the JNNURM Scheme becomes taxable under the category of 'Construction of Complex Service'?
- Whether service by way of construction of compounding wall for BECL becomes Taxable under the category of 'Commercial or Industrial Construction Service'?

Issue (a):
The appellant argued that the services provided for the construction of residential quarters for Gujarat State Police Housing Corporation Ltd should not be taxed under 'construction of complex service' as the number of units constructed was less than 12, which is below the threshold for a residential complex. They also contended that the property was transferred to the government, making it non-taxable under the principle of accretion.

Issue (b):
Regarding the construction of residential quarters for various Municipal Corporations and Nagarpalika under the JNNURM scheme, the appellant asserted that these services should not be taxed under 'construction of complex service' as they are covered by the JNNURM and are exempt from service tax.

Issue (c):
For the construction of a compounding wall for BECL, the appellant argued that this service should not be taxed under 'construction of complex service' as it does not fall under commercial or industrial construction. They also raised concerns about the incorrect computation of tax liability and the invocation of the extended period of limitation without any suppression of facts.

The tribunal found that the Adjudicating Authority had not properly considered the appellant's submissions and failed to take into account relevant judgments passed subsequently on similar issues. As a result, the tribunal set aside the impugned order and remanded the case back to the Adjudicating Authority for a fresh decision. The appellant was granted the opportunity to defend their case and present their arguments before the Adjudicating Authority.