2013 (6) TMI 646 - AT - Service Tax

Commercial or Industrial Construction Services - abatement of 67% - Held that - it can be seen that completion and finishing services necessarily relate to an incomplete or unfinished building or civil structure and necessarily it has to be in relation to new building or a civil structure. A building which has already been completed and put to use does not need any completion or finishing services. Therefore, the activities of repair, alteration, renovation or restoration undertaken by the appellant prima facie comes under clause (d) and not under clause (c ) and, therefore, the appellant is prima facie eligible for the benefit of Notification No.1/2006-ST. Tribunal inn the case of Agrim Associates Pvt. Ltd (2011 (4) TMI 845 - CESTAT, NEW DELHI) also held a similar view. - prima facie case is in favor of assessee - stay granted.

Summary

Issues:
Classification of services under 'Commercial or Industrial Construction Services' for service tax abatement eligibility.

Analysis:
The appeal in this case challenges an Order-in-Original passed by the Commissioner of Central Excise & Service Tax, Pune III, regarding the classification of services provided by the appellant under the category of 'Commercial or Industrial Construction Services'. The appellant, engaged in interior contract work, availed an abatement of 67% on the taxable value of services rendered under Notification No. 1/2006-ST. The dispute arose when the department contended that the appellant's activities did not qualify for the abatement as they related to completion and finishing services in respect of buildings or civil structures, excluded from the scope of the said Notification. Consequently, a substantial service tax demand was raised against the appellant for the period 2005-06 to 2007-08, along with interest and penalties. The impugned order confirmed the service tax demand, classifying the services under completion and finishing services category and imposing penalties. The appellant argued that their activities involved repair, alteration, renovation, or restoration services, falling under a different clause of the definition, and cited a previous Tribunal decision supporting their position.

The appellant contended that the services provided were in relation to existing buildings, not new constructions, and therefore should be classified under repair, alteration, renovation, or restoration services as per the relevant clause of the definition. They presented work orders from clients as evidence to support their claim. The appellant relied on a previous Tribunal decision that activities like dismantling work, flooring work, woodwork, painting, and finishing work on existing buildings should be classified under repair, alteration, or renovation services, making them eligible for the abatement under Notification No. 1/2006-ST. On the other hand, the Revenue argued that completion and finishing services were not limited to new buildings and encompassed all such services, placing the appellant under a different clause of the definition, thus rendering them ineligible for the abatement.

The Tribunal analyzed the definitions of 'Commercial or Industrial Construction' services under Section 65(25b) and concluded that completion and finishing services referred to incomplete or unfinished buildings or civil structures in relation to new constructions. As the appellant's activities pertained to repair, alteration, renovation, or restoration of existing buildings, they were prima facie eligible for the abatement under a different clause of the definition. Citing a previous decision supporting a similar interpretation, the Tribunal found that the appellant had established a prima facie case for waiver of pre-deposit of the dues. Consequently, the Tribunal granted unconditional waiver of pre-deposit and stayed the recovery of the dues during the pendency of the appeal.