2018 (9) TMI 1072 - AT - Service Tax

Works Contracts Services - appellant ought to have paid service tax under Commercial or Industrial Construction Services from the period 10.09.2004 to 31.05.2007 and that they were not discharging the service tax liability - Held that - The period involved in the case is from 10.09.2004 to 31.05.2007. That the issue being a works contract whether subject to service tax prior to 1.6.2007 has been settled by the judgment of the Hon ble Supreme Court in the case of Commissioner Vs. Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the appellants were liable to pay service tax under "Commercial or Industrial Construction Services" from 10.09.2004 to 31.05.2007.
2. Validity of the penalty imposed under Section 78 of the Finance Act, 1994.

Analysis:
1. The appellants were engaged in turnkey works contracts for Interior Works involving supply of materials and services. They initially registered under "Construction Services" but later switched to "Works Contracts Services." The audit in 2008 revealed non-payment of service tax under "Commercial or Industrial Construction Services" for the period 10.09.2004 to 31.05.2007. The original authority confirmed the demand and imposed a penalty under Section 78. The issue of works contracts' liability to service tax pre-1.6.2007 was settled by the Supreme Court in Commissioner Vs. Larsen & Toubro Ltd. The Coordinate Bench in CCL Products (India) Ltd. Vs. Commissioner of Central Excise also set aside a similar demand based on the Supreme Court's judgment.

2. The Tribunal, after considering the precedents and legal position, held that the demand for service tax under "Commercial or Industrial Construction Services" for the period in question was unsustainable. The impugned order was set aside, and the appeal was allowed with consequential relief, if any. The penalty imposed under Section 78 of the Finance Act, 1994, was not specifically addressed in the judgment, indicating that it might have been waived or deemed invalid based on the decision regarding the service tax liability.

This comprehensive analysis highlights the legal journey of the appellants regarding their service tax liability under different categories of works contracts and the Tribunal's decision based on relevant legal precedents and interpretations.