2023 (10) TMI 117 - AT - Service Tax

Non-payment of service tax - works contract service - construction services and construction of residential complex services provided during the period 10.09.2004 to 31.03.2008 without obtaining service tax registration - HELD THAT - The appellant has provided the above services along with materials and on material part, they have paid the VAT to the State Government. The said fact is not in dispute at all. Therefore, the merit classification of the service rendered by the appellant is works contract service which came into service tax net w.e.f. 01.06.2007 as held by the Hon ble Apex Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT , wherein the Hon ble Apex Court has observed Works contract were not chargeable to service tax prior to 1.6.2007. Further, the fact is noted that w.e.f. 01.06.2007 onwards also, no demand has been raised against the appellant under works contract service . In that circumstances, for the period post 01.06.2007 also, the appellant is not liable to pay service tax under the category of construction of commercial and residential services or construction of residential complex services. There are no merit in the impugned order and the same is set aside - appeal allowed.

Summary

Issues involved:
The judgment involves the confirmation of service tax demand under commercial or industrial construction services and construction of residential complex services during a specific period, along with the classification of services rendered by the appellant.

Confirmation of Service Tax Demand:
The appellant appealed against an order confirming the demand of service tax under commercial or industrial construction services and construction of residential complex services for a particular period. The appellant was engaged in construction of commercial and civil structures, and a show-cause notice was issued alleging non-payment of service tax without obtaining registration. The appellant contested the notice, claiming entitlement to abatement under specific notifications. However, the demand of service tax was confirmed, leading to the appeal.

Classification of Services Rendered:
The appellant argued that the services provided, along with free supply materials, should be classified as "works contract service" instead of commercial or industrial construction services or construction of residential complex services. The appellant contended that they had paid VAT on materials supplied and should not be liable for service tax under the mentioned categories. Referring to a previous Tribunal decision and the Hon'ble Apex Court's observation, the appellant asserted that works contract service came into the service tax net from a certain date, and no demand had been raised against them under this classification post that date. Consequently, the appellant claimed they were not liable to pay service tax under the previous categories.

Conclusion:
The Appellate Tribunal, after considering the submissions from both parties, found merit in the appellant's argument regarding the classification of services as "works contract service." It noted that the appellant had paid VAT on materials and that no demand had been raised against them under the works contract service category post a specific date. Therefore, the impugned order confirming the service tax demand under commercial and residential services was set aside, and the appeal was allowed with consequential relief.