Tribunal denies abatement for 'Completion and Finishing Service' under Notification No. 01/2006-ST

The Tribunal upheld the confirmed demand of service tax by denying abatement under Notification No. 01/2006-ST for the period 2005-06 to 2009-2010. The appellant's provision of 'Completion and Finishing Service' was not eligible for abatement as per the notification, leading to the imposition of penalties. The Tribunal ruled that the law was clear, and the appellant could not claim benefit based on an interpretation issue. Consequently, the appeal was dismissed, affirming the demand of service tax and penalties.

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Issues:
Appeal against confirmed demand of service tax by denying abatement under Notification No. 01/2006-ST for the period 2005-06 to 2009-2010.

Analysis:
The appellant, engaged in 'Commercial or Industrial Construction Service' and 'Works Contract Service', availed abatement under Notification No. 1/2006-ST dated 01.03.2006. However, it was found during audit that the appellant provided 'Completion and Finishing Service' which was not eligible for abatement under the said notification. Consequently, a show cause notice was issued, and the demand of service tax was confirmed by denying the abatement and imposing penalties. The appellant contended that the demand for the extended period should be dropped as it was an issue of interpretation of law and penalties should not be imposed.

The Tribunal noted that the services provided by the appellant fell under 'Commercial or Industrial Construction Service' as per Section 65 (25 b) of the Finance Act, 1944. The Notification 01/2006-ST dated 01.03.2006 clearly stated that the exemption did not apply to 'Completion and Finishing Service in relation to building of civil structure'. The law was unambiguous, and the appellant could not claim benefit based on an interpretation issue. Therefore, the extended period of limitation was rightly invoked, and the demand of service tax was correctly confirmed along with the imposition of penalties.

In light of the clear legal provisions, the Tribunal found no error in the impugned order and dismissed the appeal, confirming the demand of service tax and penalties.

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