Tribunal finds laying paver blocks in port area not 'Business Auxiliary Service'

The Tribunal ruled in favor of the appellant, M/s. Conwood Pre-Fab Ltd., determining that the laying of paver blocks in a port area did not fall under 'Business Auxiliary Service', relieving the appellant from service tax liability. The Tribunal held that the activity constituted construction service, exempt from 'Commercial Construction Service', and that subcontracting did not change the nature of the service provided. As a result, the appellant was granted a waiver on the service tax liability, with recovery stayed pending appeal.

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Issues involved: Determination of liability to pay service tax on laying of paver blocks in a port area under the category of 'Business Auxiliary Service' or 'Commercial Construction Service'.

Summary:

Issue 1: Nature of service rendered and liability to pay service tax
The appellant, M/s. Conwood Pre-Fab Ltd., undertook the activity of laying paver blocks in a port area based on work-orders received from other entities. The appellant argued that the activity constituted 'commercial construction service' and was not taxable. The department contended that the activity fell under 'Business Auxiliary Service', making the appellant liable to pay service tax. The Tribunal noted that regardless of the recipient of the service, the nature of the activity remained the same. Citing precedent, the Tribunal held that subcontracting did not alter the service rendered, and thus, the appellant was not liable to pay service tax under 'Business Auxiliary Service'. The Tribunal concluded that laying paver blocks constituted construction activity excluded from the scope of 'Commercial Construction Service', thereby waiving the service tax liability and granting a stay on recovery during the appeal.

Keywords: Service tax liability, commercial construction service, Business Auxiliary Service, subcontracting, construction activity, waiver, stay of recovery.

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