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2015 (8) TMI 639 - AT - Service TaxClassification of service - Erection, Commissioning or Installation Service (ECIS) or works contract service - Benefit of 67% Abatement - Penalty u/s 76, 77 & 78 - Invocation of extended period of limitation - Held that:- Works contract service was carved out of Services of CICS, COCS and ECIS which were subject to service tax even prior to 01/6/2007. Works contract service was specifically born w.e.f. 01/6/2007. As per the provisions contained in Section 66F (2) of the Finance Act, 1994 a specific heading has to be the appropriate classification of a service. The activities of 'works contract' undertaken by the appellant is therefore classifiable under 'works contract service' w.e.f. 01/6/2007. The same service even if provided under a works contract before 01/6/2007, will be classifiable under Erection, Commissioning or Installation Service (ECIS). Free supplies made by service recipient to the service provider for providing construction service are not includable in gross amount charged as per Section 67 of the Finance Act, 1994. It is observed from case records that appellants are using materials like cement, sand, bricks etc. in providing 'Erection, Commissioning or Installation Service, therefore, benefit of 67% abatement under Notification No. 1/2006-ST dated 01/3/2006 will be admissible for demand for the normal period of limitation. Further benefit of cum-duty has to be allowed to the appellant under Section 67 (2) of the Finance Act, 1994. For quantification of the duty demand, for the normal period of limitation on the basis of above observations, the matter is remanded to the Adjudicating Authority. Extended period was not invokable. Further appellant has claimed the benefit of Section 80 benefit as per their grounds of appeal. As appellants had a bonafide belief that no service tax was payable by them before 01/6/2007, as 'works contract service', there is a reasonable cause for non-payment of tax and benefit of Section 80 of the Finance Act, 1994 is admissible. Accordingly, it is held that no penalites under Section 76, 77 and 78 are imposable upon the appellants in these proceedings. - Decided partly in favour of Revenue.
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