2024 (8) TMI 318 - AT - Service Tax

Classification of services - works contract service or not - Construction or Renovation. Commercial/Industrial Buildings/Pipelines/Conduits Services and 'Management, of Maintenance repair Services - Time Limitation. Classification of services - HELD THAT - The service provided by the appellant falls under the definition of Works Contract Service because the certificate produced by the appellant issued by the Punjab Mandi Board dated 09.04.2013 clearly shows that the allotted work to the appellant was inclusive of cost of material and no material was supplied by the Punjab Mandi Board; therefore, once it is a Works Contract than as per the judgment of the Hon ble Supreme Court in the case of M/S. LARSEN TOUBRO LIMITED ANOTHER VERSUS STATE OF KARNATAKA ANOTHER 2013 (9) TMI 853 - SUPREME COURT ; the appellant is not liable to pay service tax under Commercial or Industrial Construction Service even prior to 01.06.2007 or after that date also. Time limitation - HELD THAT - There is no specific allegation against the appellant that they have not paid the service tax with intend to evade payment of service tax. In fact, the appellant were providing services to organizations which are not engaged in any commerce, industry or any other business or profession; therefore, the extended period of limitation is not invokable. The impugned order is not sustainable in law and the same is set aside - Appeal allowed.

Summary

Issues:
Appeals against demand of service tax, interest, and penalties; Construction or Renovation Services provided without registration or payment of service tax; Applicability of Works Contract Service; Exemption under Notification No. 25/2012-ST; Bar of limitation under Section 73 of the Act.

Analysis:
The appeals were directed against a common order confirming the demand of service tax, interest, and penalties. The appellant provided Construction or Renovation Services without registering for service tax, leading to show cause notices for recovery of service tax and imposition of penalties. The Original Authority confirmed the demand of service tax along with interest and penalties. The Commissioner (Appeals) partially allowed the appeals, confirming specific amounts of service tax. The appellant argued that the impugned order did not properly consider the facts and law, claiming the service provided did not fall under Commercial or Industrial construction but under Works Contract Service. The appellant cited legal precedents supporting their position.

The Tribunal analyzed the service provided by the appellant and concluded it fell under Works Contract Service based on evidence that the work included the cost of materials and no materials were supplied by the recipient. Citing legal precedents, the Tribunal held that the appellant was not liable to pay service tax under Commercial or Industrial Construction Service. The Tribunal referenced previous decisions where similar issues were settled in favor of the appellants, emphasizing the classification of services under Works Contract when provided along with materials.

Regarding exemption under Notification No. 25/2012-ST, the Tribunal held that services provided to government organizations or local authorities for specific works were exempt from duty. The Tribunal also considered the limitation period, noting that there was no specific allegation of intent to evade service tax, and concluded that the extended period of limitation was not applicable in this case.

In light of the analysis and legal precedents, the Tribunal found the impugned order unsustainable in law and set it aside, allowing the appeals of the appellant with consequential relief as per law. The judgment provided a detailed examination of the issues involved, including the nature of services provided, legal classifications, exemptions, and the bar of limitation under the Act.