2024 (3) TMI 920 - AT - Service Tax

Levy of service tax - commercial or industrial construction service - construction of laying solid construction of trenches and construction connecting such trenches at road crossings - period from 2004-05 to 2007-08 or not - HELD THAT - It is not disputed by the Revenue that these services have been provided by the appellant along with materials. Therefore the merit classification of the above services is works contract service as held by the Hon ble Apex Court in the case of COMMISSIONER CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS 2015 (8) TMI 749 - SUPREME COURT wherein the Hon ble Apex Court observed Works contract were not chargeable to service tax prior to 1.6.2007. Therefore as no demand has been raised against the appellant under the category of works contract service during the said period no Service Tax is payable by the appellant under commercial or industrial construction service - Moreover the Show Cause Notice in this case has also been issued by invoking the extended period of limitation which came to be issued on 20.04.2010 for the period 2004-05 to 2007-08. The impugned order set aside - appeal allowed.

Summary

Issues involved: Determination of liability to pay Service Tax for construction services under the category of "commercial or industrial construction service" during the period from 2004-05 to 2007-08.

Issue 1 - Classification of services as works contract:
The primary issue before the Appellate Tribunal was whether the appellant is liable to pay Service Tax for the service of construction under the category of "commercial or industrial construction service" during the specified period. The Tribunal noted that the Revenue did not dispute that the services were provided by the appellant along with materials. The Tribunal referred to the classification of the services as "works contract service," as established by the Hon'ble Apex Court in previous cases. The Tribunal highlighted the distinction between works contracts and contracts for services simpliciter, emphasizing that works contracts are recognized as a separate species of contract that must be taxed separately.

Issue 2 - Application of extended period of limitation:
Another key issue addressed in the judgment was the invocation of the extended period of limitation in the Show Cause Notice issued to the appellant. The Notice was issued on 20.04.2010 for the period spanning from 2004-05 to 2007-08. The Tribunal considered the implications of invoking the extended period of limitation in this case and its impact on the proceedings.

Conclusion:
Based on the analysis of the issues at hand, the Appellate Tribunal held that no demand had been raised against the appellant under the category of "works contract service" during the specified period. Therefore, the Tribunal concluded that no Service Tax was payable by the appellant under the classification of "commercial or industrial construction service." Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief that may arise from the decision. The judgment was dictated and pronounced in open court by the designated Member.