2018 (8) TMI 1227 - AT - Service Tax

Works Contract Service - Commercial or Industrial Construction services - it was a contention of the appellant construction contract supply and services would fall under works contract services that they have paid VAT on the works contract services - penalties - Held that - The period involved in this case is post 01.06.2007 - In the adjudication order that there is no dispute as to the facts that the contracts which were executed by the appellant/assessee during the period in question were works contract. Since the issue involved is regarding the works contract prevailing the same in the various services. The issue is no more res integra as per the judgment of the Apex Court in the case of Larsen & Tourbo Ltd. 2015 (8) TMI 749 - SUPREME COURT , where it was held that Works contract were not chargeable to service tax prior to 1.6.2007. Non-imposition of penalties - Revenue argued on the non-imposition of penalties - Held that - Since we have already allowed the assessee s appeal on merits, there are no merits in the appeal filed by the Revenue. Appeal allowed - decided in favor of assessee.

Summary

Issues:
1. Appeal against Order-in-Original on merits.
2. Revenue's appeal for non-imposition of penalties.

Analysis:
1. The appeals were filed against Order-in-Original No. 08/2008 dated 26.12.2008, with Appeal No. ST/452/2009 by the assessee on merits and Appeal No. ST/402/2009 by the Revenue for non-imposition of penalties. The Revenue Authorities issued a show cause notice to the appellant for demand of differential service tax for the period September 2004 to March 2007, alleging that the contracts executed by the appellant customers for Construction of Commercial or Residential Construction business fell under specific service tax categories. The appellant contested the notice on merits and limitation. The Adjudicating Authority rejected the contentions and confirmed the demands raised.

2. The appellant argued that the contracts were works contract services and VAT had been paid on them. The appellant referred to a judgment of the Hon’ble Supreme Court in a similar case. The Departmental Representative contended that the appellants were discharging service tax under various categories during the relevant period and could not deny liability now. The Tribunal observed that the contracts executed by the appellant were works contracts, and the issue was settled by the Supreme Court judgment. The Tribunal highlighted the importance of deductions in determining the value of goods in a works contract. Referring to a previous case, the Tribunal set aside the Order-in-Original due to the judgment of the Apex Court.

3. The Tribunal found that the impugned order was unsustainable and set it aside. Since the assessee's appeal on merits was allowed, the Revenue's appeal had no merits and was rejected. The judgment emphasized the specific requirements for the levy of service tax on works contracts and the importance of correctly determining the value of services in such contracts. The decision was based on legal precedents and the interpretation of relevant provisions.