Tribunal allows additional submissions on service tax appeal. Pre-2007 works contracts exempt from service tax.

The Tribunal granted the appellant's request to submit additional legal submissions under CESTAT Rules. An appeal against a service tax demand of Rs. 2,15,40,896 was based on service nature, failure to declare material value, and abatement inapplicability. The appellant argued the non-payment of service tax pre-01/06/2007 under works contracts, citing the Larsen & Toubro Ltd. case. The Tribunal ordered a re-computation of demand considering the Supreme Court judgment and new works contract rules. No service tax was deemed payable pre-01/06/2007 for works contracts, with a remand for demand and penalty reassessment post that date.

---

---

Issues involved:
- Submission of additional grounds under CESTAT (Procedure) Rules, 1982.
- Confirmation of service tax demand for a specific period.
- Eligibility for abatement under notifications 15/2004 - ST and 1/2006 - ST.
- Applicability of Supreme Court judgment in the case of Larsen & Toubro Ltd.
- Computation of demand and penalty.
- Works contracts service and payment of service tax.

Submission of Additional Grounds:
The appellant filed a miscellaneous application seeking permission to submit additional legal nature submissions under CESTAT (Procedure) Rules, 1982, which was granted by the Tribunal.

Confirmation of Service Tax Demand:
An appeal was filed against the order confirming a service tax demand of Rs. 2,15,40,896 for a specific period. The demand was based on the nature of service provided by the appellant, failure to declare the value of material received free of cost, and the ineligibility for abatement under certain notifications. The appellant later started discharging service tax liability on 20% of the gross amount charged, claiming VAT payment on the rest 80%, but failed to provide supporting documents.

Applicability of Supreme Court Judgment:
The appellant cited the Supreme Court judgment in Larsen & Toubro Ltd. vs. C.C.E., arguing that no service tax was payable before 01/06/2007 as the service was rendered under works contracts. The appellant claimed to have evidence of material value and eligibility for the composition scheme. The Tribunal acknowledged the need to recompute the demand in light of the Supreme Court judgment.

Computation of Demand and Penalty:
The Revenue contended that the appellant lacked evidence on material value and had availed input credit. It was argued that abatement benefits were not available due to the nature of the service provided. The Tribunal agreed that the demand needed to be recalculated based on the Supreme Court judgment and the new rules introduced for works contracts service.

Works Contracts Service and Payment of Service Tax:
Considering the nature of service rendered under works contracts involving both labor and material supply, the Tribunal held that no service tax was payable before 01/06/2007. For the period after that date, the appeal was allowed for remand to the primary authority for re-computation of demand as per works contract provisions. The penalty was also to be reassessed based on the recomputed demand and the appellant's submissions.

---