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2009 (8) TMI 174 - AT - Service TaxDemand of service tax is on the cost of materials used in rendering the “commercial or industrial construction service” from 16-6-2005 to 31-3-2006 - According to the assessee, on cost of material, sale tax was paid, so it was not included in value of service - This argument of the assessee may be good for the period from 1-6-2007 when the “works contract” concept made its way into the domain of service tax for the first time. Prior to 1-6-2007, the assessee was rendering a service which squarely fell within the ambit of “construction service” upto 15-6-2005 and “commercial or industrial construction services” thereafter upto 31-3-2006. The assessee has never disputed this fact. We are not impressed with their present attempt to escape tax liability for the period upto 31-3-2006 on the strength of a doctrine which was introduced on 1-6-2007 with prospective effect – since materials sold to service recipient as evidencd by invoices showing cost of materials separately and sales tax paid thereon, benefit of exemption under notification 12/2003-S.T. is admissible – In respect of tax liability on the “commercial or industrial construction service” rendered as sub-contractor, Circular dated 23-8-2007 stting sub-contractors as liable to pay service tax “oppressive” and hence, having prospective effect only - the assessee should not be asked to pay service tax if main contractor has paid the tax - however, their claim for abatement under Notification 1/2006 ST dated 1-3-2006 should be considered if appellant held liable to pay tax -
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