2018 (5) TMI 219 - AT - Service Tax

Commercial or Industrial Construction Service - case of appellant is that since the activities were for the construction of residential flats, which were less than twelve in numbers, such activities cannot be considered as taxable service, under the category of Construction of Commercial or Industrial Service - Held that - It is evident from the work entrusted to the appellant that the same are not for construction of residential houses. Since the appellant is an independent service provider, the activities undertaken by it, in our considered view, should not fall under the category of Construction of Residential Complex Service . Further, the documents do not indicate that the appellant had supplied any material for execution of the job or had paid VAT/Sales Tax into the Government exchequer with regard to purchase of any goods - contention of the appellant cannot be accepted that it had provided Works Contract Service to M/s. Prabhu Construction. Appeal dismissed - decided against appellant.

Summary

Issues: Classification of services under 'Construction of Commercial or Industrial Service' vs. 'Works Contract Service' for taxation purposes.

Analysis:
1. Facts of the Case: The appellant was awarded a work order for 'Civil Masonry Work' by a contractor. The Service Tax department observed that the services provided by the appellant fell under the category of 'Commercial or Industrial Construction Service' and demanded service tax along with penalties for non-compliance.

2. Appellant's Argument: The appellant contended that the construction activities were for residential flats, numbering less than twelve, and should be classified under 'Works Contract Service' with the benefit of abatement under a specific notification.

3. Revenue's Argument: The Revenue argued that the services provided, including construction of RCC Slabs/Beams, Excavation of Tank, and Cement Plastering, did not qualify as 'Construction of Residential Complex Services' and should be taxed under 'Construction of Commercial or Industrial Service'.

4. Decision: The Tribunal analyzed the nature of the work undertaken by the appellant, which included various construction activities. It was noted that the work was not for residential houses and that the appellant did not provide evidence of supplying labor or materials for the job. Consequently, the Tribunal upheld the classification of services under 'Construction of Commercial or Industrial Service' and dismissed the appellant's appeal against the service tax demand.

5. Conclusion: The Tribunal found no error in the impugned order confirming the service tax demand on the appellant. The appeal was consequently dismissed, and the decision was pronounced in court on 20.04.2018.