2019 (4) TMI 1805 - AT - Service Tax

Tribunal classifies construction as Works Contract Service, allowing exemption.

M/s NJ Devani Builders Pvt. Ltd Versus C.S.T. & S.T. - Ahmedabad

M/s NJ Devani Builders Pvt. Ltd Versus C.S.T. & S.T. - Ahmedabad - TMI Issues: Classification of taxable services under service tax law; Denial of benefit of exemption under Notification No. 12/04-ST; Applicability of Works Contract Service classification.Classification of Taxable Services:The appeal challenged the order passed by the Commissioner (Appeals), Service Tax, Ahmedabad, regarding the denial of exemption under Notification No. 12/04-ST. The appellant, engaged in providing taxable services like Commercial and Industrial Construction Service, argued that the services provided should be classified as works contract service rather than Construction of Residential Complex service. The appellant contended that the construction activity undertaken was composite, comprising both service provision and goods supply. The appellant relied on the judgment of the Hon'ble Supreme Court in CCE & Customs, Kerala Vs. Larsen & Toubro Ltd and a decision of the Tribunal in Vistar Construction Pvt. Ltd Vs. CST, New Delhi to support their argument.Denial of Benefit of Exemption:The Revenue, represented by the Authorized Representative, supported the findings of the impugned order and argued that the denial of the benefit of abatement under Notification No. 12/04-ST was the core issue. The Revenue emphasized that the taxability of the disputed service under a new category could not be claimed by the appellant at that stage. The Revenue contended that the judgments cited by the appellant were not applicable to the present case.Applicability of Works Contract Service Classification:After hearing both sides and reviewing the records, the Tribunal found that the construction activity involved a composite contract, including the supply of goods for execution. The Tribunal determined that the appropriate classification of the taxable service should be Works Contract Service, taxable from 01.06.2007. Citing the Supreme Court's decision in Larsen & Toubro Ltd case and a Tribunal decision in Vistar Construction Pvt. Ltd case, the Tribunal ruled that if a service involves both service provision and goods supply, it should be considered a composite service under Works Contract Service. Therefore, the Tribunal concluded that the impugned order had no merit in classifying the service under a different category and allowed the appeal in favor of the appellant by setting aside the order.This detailed analysis of the judgment highlights the issues of classification of taxable services, denial of exemption under Notification No. 12/04-ST, and the application of Works Contract Service classification, providing a comprehensive understanding of the legal aspects involved in the case.