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2024 (7) TMI 1256 - AT - Service TaxFailure to discharge appropriate service tax on the consideration received by them for the various projects - appellant discharged service tax under Commercial or Industrial Construction Services (CICS) upto 30.06.2012 and thereafter paid the service tax under Works Contract Service (WCS) - HELD THAT - The department has confirmed demand for the period 01.07.2012 to 31.03.2013 under the category of CICS. Undisputedly, the appellant has availed the benefit of Notification No.1/2006 and 30/2012 for the reason that they have used materials for providing the construction services. In the case of Bhayana Builders 2018 (2) TMI 1325 - SUPREME COURT , the Hon ble Apex Court held that even if free materials are provided, the abatement would be eligible. The Department has taken a view that the appellant has not furnished evidence to show that materials were used for providing construction service for which reason abatement has been denied. The Ld. Counsel submitted that the appellant would be able to furnish sufficient evidence to establish that the contracts are composite in nature and would not fall under the category of CICS. From the submissions made by both sides, it is opined that the matter requires to be remanded to the adjudicating authority who is directed to consider all issues afresh. Needless to say that if the contracts are composite in nature, the appellant would be eligible for the abatement. The original authority is directed to consider the applicability of the Tribunal s decision in the case of R.R. Thulasi Builders (I) Pvt. Ltd. Vs CGST Central Excise, Salem 2024 (7) TMI 1067 - CESTAT CHENNAI as well as Real Value Promoters Pvt. Ltd. Vs CGST Central Excise, Chennai 2018 (9) TMI 1149 - CESTAT CHENNAI and Jain Housing Construction Ltd. Vs CST, Chennai 2023 (2) TMI 1044 - CESTAT CHENNAI which is maintained by the Hon ble Apex Court in 2023 (9) TMI 816 - SC ORDER . The appellant shall be given opportunity of hearing as well as liberty to furnish evidence. The appeal is allowed by way of remand to the adjudicating authority.
Issues:
1. Demand of service tax under Commercial or Industrial Construction Services (CICS) for the period from 01.04.2012 to 30.06.2012 and 01.07.2012 to 31.03.2013. 2. Eligibility for abatement under composite contracts. 3. Levy of service tax on construction of educational institutions. 4. Denial of abatement under Notification No.1/2006 and 30/2012. 5. Need for remand to establish composite nature of contracts and services rendered. Analysis: Issue 1: Demand of service tax under CICS The appellant, engaged in construction services, paid service tax under CICS until 30.06.2012, then under Works Contract Service (WCS). The Department alleged inadequate service tax payment for executed projects. The Tribunal noted that service tax for construction of educational institutions is not applicable for commercial purposes, citing relevant case law. The matter was remanded to establish the composite nature of contracts and services for the period before 30.06.2012. Issue 2: Eligibility for abatement under composite contracts The appellant argued that their contracts were composite, involving material supply and services, citing legal precedents. They sought a chance to prove the composite nature of contracts. The Tribunal agreed that a remand was necessary to determine if the contracts were indeed composite, allowing for abatement. Issue 3: Levy of service tax on construction of educational institutions The appellant contended that service tax for construction of educational institutions is not applicable for the period before 30.06.2012. The Tribunal referred to past cases and directed a remand to verify the services rendered to educational institutions and the composite nature of contracts. Issue 4: Denial of abatement under Notifications The Department denied abatement under Notification No.1/2006 and 30/2012 due to lack of evidence showing material usage for construction services. The appellant requested a chance to provide evidence of composite contracts. The Tribunal remanded the matter for a fresh consideration, emphasizing the need to establish composite nature for abatement eligibility. Issue 5: Need for remand to establish composite nature of contracts and services rendered Considering the arguments and evidence presented, the Tribunal set aside the impugned order, directing the original authority to reevaluate based on relevant case law. The appellant was granted an opportunity to present further evidence and arguments before the adjudicating authority. In conclusion, the appeal was allowed by way of remand to address the issues raised regarding service tax demands, abatement eligibility under composite contracts, and the levy of service tax on specific types of construction projects.
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