2023 (6) TMI 1409 - AT - Service Tax

Classification of service - Erection, Commission or Installation Service, Commercial or Industrial Construction Service, Construction of Complex Service or works contract service - HELD THAT - The services have been supplied by the appellants along with materials, which are not disputed by the Adjudicating Authority. In that circumstances, the activity undertaken by the appellant merits classification under the category of Works Contract Service . For prior to the period 01.06.2007, no service tax was payable by the appellant as held by the Hon ble Supreme Court in the case of LARSEN AND TOUBRO LIMITED VERSUS COMMISSIONER 2015 (8) TMI 1583 - SC ORDER . It is further noted that for the period post 01.06.2007, the proper classification of the activity undertaken by the appellant merits classification under the category of Works Contract Service . The show-cause notice has not been issued to the appellant to demand under Works Contract Service . All the demands against the appellant are not sustainable - the impugned order is set aside - appeal allowed.

Summary

Issues:
Demand of service tax and penalty under Section 78 of the Finance Act, 1994 for construction services provided by the appellant.

Analysis:
The appellant, engaged in civil constructions and providing services in infrastructure projects exempted from service tax, received a show-cause notice in 2009 for demanding service tax on various services. The impugned order confirmed the demand of service tax and penalty. The appellant did not appear, but the Revenue reiterated the findings. The Tribunal noted that the services were provided along with materials and classified the activity as "Works Contract Service." Citing a Supreme Court case, it held that no service tax was payable by the appellant before June 2007. For the period post-June 2007, the activity also fell under "Works Contract Service," but the show-cause notice did not demand under this category. Consequently, the Tribunal found the demands against the appellant unsustainable and set aside the impugned order, allowing the appeal with any consequential relief.

This judgment addresses the issue of demanding service tax and penalty under Section 78 of the Finance Act, 1994 for construction services provided by the appellant. The Tribunal examined the nature of the services provided by the appellant and classified them as "Works Contract Service." It considered the period before and after June 2007, citing a relevant Supreme Court case to determine the tax liability. The Tribunal found that the demands made against the appellant were not sustainable based on the classification of services and the absence of a specific demand under the correct category. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

In conclusion, the judgment revolves around the classification of services provided by the appellant as "Works Contract Service" and the applicability of service tax before and after June 2007. The Tribunal found the demands for service tax and penalty unsustainable due to the misclassification of services and the absence of a specific demand under the correct category. As a result, the impugned order was set aside, and the appeal was allowed with any consequential relief that may arise.