2024 (2) TMI 17 - AT - Service Tax

Classification of the services rendered - to be classified under Construction of Complex Service for the period April 2006 to March 2011 or not - HELD THAT - The appellant submits that during the period they have executed composite contracts involving material which are rightly classifiable as works contract service. In view of the decision of the Hon'ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT , the appellant s contention needs to be examined afresh. The appellant also submits that the adjudicating authority has not extended the abatement for the demands confirmed under works contract service . It is their contention that these contracts were also executed with materials and hence they are eligible for abatement. Their submission that some of the contracts executed by them are not liable to service tax also need to be examined along with relevant documents. The demand confirmed in the impugned order under construction of complex service and works contract service needs to be examined afresh. Accordingly, the demands confirmed in the impugned order is set aside and matter remanded back to the adjudicating authority for deciding all the issues afresh. The appeal filed by the appellant is disposed of by way of remand to the adjudicating authority.

Summary

Issues involved:
The classification of services rendered by the appellant under Construction of Complex Service and Works Contract Service, demand confirmation without abatement, and eligibility for exemptions from payment of service tax.

Classification of services:
The appellant argued that services rendered under 'composite contracts' involving transfer of property in goods should be classified as Works Contract Service, not Construction of Complex Service. Citing the decision in CCE Vs. L&T Ltd., the appellant's contention was deemed to require fresh examination. The appellant also claimed that demands confirmed under Works Contract Service should have been granted abatement, as these contracts involved materials. Additionally, the contention that certain contracts were not liable to service tax required examination with relevant documents. The Tribunal set aside the demands confirmed in the impugned order and remanded the matter for a fresh decision by the adjudicating authority, instructing the appellant to submit all relevant documents for reevaluation of service classification, valuation, and abatement eligibility.

Demand confirmation without abatement:
The appellant argued that demands confirmed without abatement under Works Contract Service were not sustainable, as the contracts involved materials. They contended that the demand of service tax without abatement on the value of transfer of property in goods was unjustified, especially since they had not opted for the Composition Scheme. The Tribunal found merit in this argument and directed a reevaluation of the demands confirmed under Works Contract Service, emphasizing the need to consider abatement eligibility for contracts involving materials.

Eligibility for exemptions:
The appellant claimed that certain works, such as the construction of residential complexes for the Tamil Nadu Slum Clearance board, were exempt from service tax as they were meant for personal use by beneficiaries. They argued that they could not present all relevant documents during the initial hearing to claim these exemptions. Consequently, they requested a remand for denovo adjudication to allow for a fresh examination of their eligibility for exemptions. The adjudicating authority and the appellant's counsel had no objections to this request, leading to the Tribunal setting aside the impugned order and remanding the matter for reevaluation of all issues, including exemption eligibility based on relevant documents.