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2019 (12) TMI 1064 - AT - Service TaxCommercial or Industrial Construction - Works Contract Services - services for Construction of 3.2 MLD Sewerage Treatment Plant at Bhiwadi as sub-contractor to M/s. Enviro Engineers - Commissioner bifurcated the period of demand in two parts i.e. prior and post 01.07.2012 i.e. after introduction of negative list vide notification no.25/2012 dated 20.06.2012 - extended period of limitation. HELD THAT - The demand stands confirmed under a category different than the one proposed in the show cause notice. In the absence of any proposal in the notice to confirm the demand under the category of erection commissioning and installation services, it was not open to the Revenue to go beyond the show cause notice - This was so held by the Tribunal in the case of GAMBHIR CONSTRUCTION COMPANY VERSUS C.C.E. S.T. -LUCKNOW 2017 (6) TMI 1107 - CESTAT ALLAHABAD , which stands followed in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, LUCKNOW VERSUS M/S SONU CONSTRUCTION (VICE-VERSA) 2018 (9) TMI 1364 - CESTAT ALLAHABAD - As such, there are no reasons to uphold the impugned demand. Extended period of limitation - HELD THAT - As per facts on record, after the audit objection, a lot of correspondence was exchanged between the Appellant and the Revenue in the month of December, 2010. In such a scenario raising of demand in September, 2014 by invoking the longer period of limitation, cannot be held to be proper and justifiable - the demand is barred by limitation also. Appeal is allowed on merits as also on limitation.
Issues:
1. Tax liability on services provided as a sub-contractor for construction projects. 2. Time bar for raising demand on service tax. 3. Classification of services under works contract services or erection commissioning and installation. Analysis: Issue 1: Tax liability on services provided as a sub-contractor for construction projects The appellant was registered under the category of Commercial or Industrial Construction and Works Contract Services and provided services for the construction of a Sewerage Treatment Plant and school building as a sub-contractor. The audit raised concerns about the tax liability under works contract services. The Commissioner classified the services for the sewerage treatment plant under erection commissioning and installation, leading to the demand for service tax for a specific period. However, the demand for tax on the construction of the school building and short term loan was dropped by the Commissioner. Issue 2: Time bar for raising demand on service tax The demand for service tax was contested on merits and time bar. The Commissioner bifurcated the demand period into pre and post 01.07.2012, dropping the demand for the school building construction for both periods. The appellant argued that the demand was time-barred, citing the delay in raising the demand after initial audit objections in 2010. The Tribunal held that the demand raised in 2014, invoking the extended period of limitation, was not justified due to the correspondence between the appellant and the Revenue in 2010. Therefore, the demand was deemed barred by limitation. Issue 3: Classification of services under works contract services or erection commissioning and installation The demand was confirmed under a different category than proposed in the show cause notice, which the Tribunal found impermissible. The Tribunal cited precedent cases to support the position that the Revenue cannot go beyond the show cause notice in confirming demands. Additionally, the demand was raised invoking the longer period of limitation, which was deemed unjustifiable due to the extensive correspondence between the parties in 2010. Consequently, the demand was set aside, and the appeal was allowed on merits and limitation.
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