TMI Blog2023 (7) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ffective date, the services involving both provision of service and supply of goods on payment of VAT shall not fall under the category of any other defined taxable service and same should be considered as works contract service only - 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] have held that irrespective of classification of service, when the service involves supply of goods on payment of VAT, the same should be classified as works contract service alone. Since, the construction activity provided by the appellant was for the period June 2005, the same cannot be liable for payment of service tax inasmuch as works contract ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RT] , no service tax demand shall be fastened on the appellants. Hence, an amount of Rs.4,27,623/- confirmed in the impugned order cannot be sustained. Consulting Engineer Service (import of services) - Goods Transfer Agency Service - HELD THAT:- The appellants are not contesting such demands confirmed in the impugned order. However, the appellants have pleaded that imposition of penalties in the impugned order cannot be sustained, since there was reasonable cause for non-payment of service tax by the appellants. Extended period of limitation - penalty - HELD THAT:- There was ambiguity with regard to payment of service tax by the recipient of the said services, under reverse charge mechanism. There were also divergent views expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai-II has confirmed service tax demand along with interest and also imposed penalties under Section 76, 77 and 78 of the Finance Act, 1994. Feeling aggrieved with the impugned order, the appellants have preferred this appeal before the Tribunal. 2. Heard both sides and examined the case records. 3.1 With regard to dredging service, the appellants were awarded the contract for Construction of Weir on River Krishna downstream of Srisailam Dam in roller compacted concrete by Andhra Pradesh Power Generation Corporation Limited. The period involved in the said case was up to June 2005. Schedule appended to the work order had specifically provided that Sales Tax on materials and Works Contract Tax levied by the Government is to be paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants vide their letter dated 15.07.2006 had confirmed regarding payment of service tax in respect of the services provided to M/s Pratibha Industries Limited. Further, we also find that during the course of adjudication and in the appeal memorandum filed before the Tribunal, the appellants have not specifically contested such demand confirmed in the impugned order. Thus, we are of the view that such demand of Rs.2,31,397/- confirmed in the impugned order is sustainable and the appeal filed by the appellants to such extent is liable for dismissal. 3.3 With regard to the service tax demand confirmed on Commercial and Industrial Construction Service , we find that the services provided by the appellants involved both execution of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat this is a fit case for invocation of the provisions of Section 80 ibid for non-imposition of penalties. Therefore, the penalties imposed in the impugned order under Sections 76, 77 and 78 ibid are liable to be set aside. 4. In view of the forgoing discussions, the appeal filed by the appellants is disposed of in following manner:- Description of Services provided Received Service Tax demanded confirmed in impugned order Order passed by the Tribunal Dredging Services 3,22,401/- Demand set aside as per discussions at para 3.1 above Consulting Engineer s services 2,31,397/- Dem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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