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2023 (11) TMI 894 - AT - Service TaxLevy of service tax - Commercial Construction Services - composite contract - appellant provided services without taking any ST registration number, nor filed ST-3 returns as prescribed under the Finance Act, 2004 - prior to 01.06.2007 - HELD THAT - After considering the submissions of both the parties and perusal of material on record, it is found that the period involved in both the appeals is prior to 01.06.2007 and the service tax has been confirmed under Commercial Construction Services whereas both the Revenue authorities have admitted that it was works contract service which involves construction activity and supply of material, thus, making the contracts as composite contract - this issue has been settled 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 it has been categorically held by the Hon ble Apex Court that composite contract were not taxable under service tax prior to 01.06.2007. In the present case, it was a composite contract involving service and material and therefore, could not have been taxed before 01.06.2007 i.e. before enactment of works contracts service. The impugned order is not sustainable in law and therefore set aside - appeal allowed.
Issues involved: Appeal against demand of service tax, interest, and penalty under Section 78 based on Works Contracts provided to Nestle India Pvt. Ltd. from 2004 to 2006.
The judgment addresses the following issues comprehensively: 1. Confirmation of demand of service tax, interest, and penalty: The appellant provided Works Contracts services to Nestle India Pvt. Ltd., leading to the issuance of show cause notices by revenue authorities. The adjudicating authority confirmed the demand of service tax, interest, and penalties. The Commissioner (Appeals) partially appreciated the submissions, allowing 67% abatement and vacating penalty under section 76 but maintaining the extended period of limitation and penalty under Section 78 intact. 2. Nature of services provided: The appellant argued that the services provided were composite in nature involving supply of material under a Works Contract, supported by WCT TDS certificates and Form 15 (quarterly VAT returns). The appellant contended that the services were not taxable under Service Tax prior to 01.06.2007, citing relevant legal precedents including the case of Commissioner of Central Excise & Customs, Kerala Vs. M/s Larsen & Toubro Ltd. 3. Legal interpretation and decision: The Tribunal, after considering submissions and case records, found that the services provided were composite contracts involving both service and material, making them non-taxable before 01.06.2007. Relying on the decision in Commissioner of Central Excise & Customs, Kerala Vs. M/s Larsen & Toubro Ltd., the Tribunal held that the impugned order confirming service tax demand under Commercial Construction Services was unsustainable. Consequently, the Tribunal set aside the impugned order, allowing the appeals of the appellant with consequential relief as per law.
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