2016 (9) TMI 586 - AT - Service Tax

Demand - Commercial or Industrial Construction Service - appellant is engaged in the activity of construction of office/branches on behalf of ICICI Bank in the state of Punjab under composite contract - appellant contended that the activities undertaken by them falls under the category of work contract service w.e.f. 01-06-2007 - Held that - it is evident from the show cause notice as well as from the adjudication order that the contract entered by the appellant with the recipient of the services cannot be vivisected. Therefore, the decision of Hon ble Apex Court in the Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT is squarely applicable to the facts of this case. Therefore, the activities of the appellant fall under the category of work contract service , which was made chargeable to service tax w.e.f. 01-06-2007. The period prior to 01-06-2007, the activity undertaken by the appellant was not chargeable to service tax. - Decided in favour of appellant with consequential relief

Summary

Issues:
Appeal against service tax demand for commercial or Industrial Construction Service.

Analysis:
The appellant appealed against an order demanding service tax for engaging in commercial or Industrial Construction Service. An internal audit revealed the alleged engagement in such services during a specific period, leading to a show cause notice for tax payment, interest, and penalty. The appellant contended that their work fell under 'work contract service' since 01-06-2007, citing a case precedent. The respondent supported the impugned order. The tribunal examined the contract's indivisibility and referred to a Supreme Court decision stating that composite works contracts do not attract service tax. Consequently, the tribunal held that before 01-06-2007, the activity was not taxable. The impugned order was set aside, and the appeal was allowed.