2024 (7) TMI 307 - AT - Service Tax

Levy of service tax - Commercial Construction Service/Works Contract Service - demand made solely on the ground that the Appellant has not submitted their option latter for switching over form Construction of Commercial Complex Service to Works Contract Service - HELD THAT - This issue is no more res integra. The very issue came up for consideration before the Tribunal in the case of M/S. ABL INFRASTRUCTURE PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NASHIK 2015 (2) TMI 801 - CESTAT MUMBAI , wherein the Bench has held ' the fact of paying Service Tax at the composition rate in the returns filed by them, is enough indication to show that they have opted for payment under the Works Contract Composition Scheme.' The Adjudicating authority is directed to first verify as to whether the Appellants have paid Rs.58.88 Lakhs as claimed by them for which the Appellant would be given an opportunity to file the documentary evidence. Further, if Rs.60.00 Lakhs is taken as payable and Rs.58.88 Lakhs is taken as paid, the balance Rs.1.12 Lakhs also is required to be paid, along with interest. In respect of Rs.22,92,514/-, which is short paid as per the Order-in-Original, the Ld.C.A. has submitted C.A. s Certificate. The Adjudicating authority is directed to verify the same along other documentary evidence to be placed by the Ld.C.A. The Appeal is partly allowed and partly remanded.

Summary

Issues:
1. Appellant's liability for Service Tax under 'Construction of Commercial Complex Service' vs. 'Works Contract Service'.
2. Alleged failure to file option letter for switching services.
3. Demand for short payment of Service Tax during a specific period.

Analysis:
1. The Appellant, a provider of 'Construction of Commercial Complex Service', faced a Show Cause Notice alleging non-filing of an option letter to switch to 'Works Contract Service'. The demands raised were challenged before the Tribunal. The Appellant contended that they started paying Service Tax under the composition scheme for ongoing projects falling under 'Works Contract Service' post the introduction of the new service category. Reference was made to a precedent where filing ST-3 Returns indicating payment under 'Works Contract Service' was deemed sufficient intimation to the Department. The Tribunal, following the precedent, set aside demands totaling Rs. 80,55,442/-, subject to the Appellant paying Rs. 60.00 Lakhs, as self-calculated, after verification by the Adjudicating authority.

2. The Tribunal emphasized that the issue of non-filing of an option letter had been settled in the cited case law, stating that paying tax under the composition scheme, as reflected in the returns, was indicative of opting for 'Works Contract Service'. The demands of Rs. 70,01,573/- and Rs. 10,53,869/- were quashed based on this reasoning. The Appellant was directed to pay the balance amount of Rs. 1.12 Lakhs, if verified by the Adjudicating authority, in addition to interest. The Tribunal instructed the Adjudicating authority to verify the Appellant's claims regarding payments made during litigation.

3. Regarding the demand of Rs. 22,92,514/- for short payment during a specific period, the Appellant submitted a C.A.'s Certificate citing a computation error leading to the alleged shortfall. The Tribunal remanded this issue to the Adjudicating authority for verification along with other documentary evidence provided by the Appellant. The Appeal was partly allowed and partly remanded, with detailed instructions for verification and payment compliance.