2024 (10) TMI 380 - AT - Service Tax

Non-payment of service tax on advances received - non-inclusion of value of materials supplied by the customers in the assessable value - recovery of service tax with interest and penalty - whether the appellant is required to pay service tax for rendering commercial or industrial construction and construction of complex services , during the period in question i.e. 16.06.2005 to 31.03.2006? - HELD THAT - The appellant explained that they have paid the service tax on the advances received during the period in question at the time of settling the final bills, which the learned Commissioner has recorded in the impugned order. As far as the remaining demand of Rs.58,34,404/- is concerned, it is found that the issue is covered by the judgment of the Hon ble Supreme Court in the case of COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. 2018 (2) TMI 1325 - SUPREME COURT . Also, it is found that the appellant had undisputedly rendered Works Contract Service during the relevant period as has been repeatedly mentioned in the reply to the show-cause notice and referred to in the impugned order. Further, it is found that this Tribunal in the appellant s own case, for subsequent period 2006 to 2009, has concluded that the appellant has provided Works Contract service. In these circumstances, there are no merit in the impugned order. The impugned order is set aside and the appeal is allowed.

Summary

Issues:
1. Allegation of non-payment of service tax on advances received.
2. Allegation of non-payment of service tax on cost of materials supplied by customers.
3. Invocation of extended period of limitation for recovery of service tax.
4. Applicability of service tax on 'works contract' services.
5. Justification for interest and penalty imposition.

Analysis:

The appeal was filed against an Order-in-Original passed by the Commissioner of Central Excise-II, Bangalore, alleging non-payment of service tax on advances received and cost of materials supplied by customers during the period June 2005 to March 2006. The appellant contended that the services provided were in the nature of 'works contract' and not liable to service tax. The appellant also argued that the issue of including the value of materials in the cost of taxable value was covered by a Supreme Court judgment. The appellant claimed that the entire service tax amount related to advances had been paid while settling the final bill. Additionally, the appellant challenged the invocation of the extended period of limitation, citing the filing of periodical ST-3 returns and the non-leviability of service tax on 'works contract' services before 01.06.2007 based on a Supreme Court judgment.

The Tribunal considered whether the appellant was required to pay service tax for providing 'commercial or industrial construction' and 'construction of complex services' during the period in question. The Tribunal noted that the appellant had paid service tax on advances received during the relevant period and that the issue of non-payment of service tax on the cost of materials supplied was covered by a Supreme Court judgment. It was established that the appellant had rendered 'Works Contract Service' during the period in question, as acknowledged in the show-cause notice and the impugned order. The Tribunal referred to its own decision in the appellant's subsequent case, where it was concluded that the appellant had provided Works Contract service. Consequently, the Tribunal found no merit in the impugned order, setting it aside and allowing the appeal with any consequential relief as per law.