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Issues: Whether service tax could be demanded on works contract and commercial or industrial construction services completed before 01.06.2007 merely because the consideration was received after that date.
Analysis: The services in question were admittedly rendered and completed prior to 01.06.2007. The demand arose only because the receipts for those already-completed services were reflected in the later ST-3 returns when payment was actually received. The Tribunal followed the settled position that such services, when rendered before 01.06.2007, were not exigible to service tax merely on the basis of later receipt of consideration. The earlier decision in the appellants' own case and the Supreme Court ruling on the non-leviability of service tax on such pre-01.06.2007 works contract services supported the same view. In that situation, the denial of abatement and the consequential demands could not survive.
Conclusion: The demand of service tax was unsustainable and the impugned orders were liable to be set aside in favour of the assessee.
Final Conclusion: The appeals succeeded and the demand orders were annulled, with consequential relief as available in law.
Ratio Decidendi: Services completed before the relevant levy date do not become taxable merely because payment for those services is received later.
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