2018 (2) TMI 1256 - AT - Service Tax

Construction Services Excluded from Service Tax Liability; 'Miscellaneous Receipts' Classification Appeal Allowed

Continental Construction Ltd. Versus CST (Adj.), New Delhi And Vice-Versa

The Tribunal dismissed the Revenue's appeal regarding service tax liability on construction services provided by the appellant for specific projects, ... Commercial and Industrial Construction Services - Construction services - Maneri Bhali Hydro-Electric Project - LARJI HYDRO-ELECTRIC PROJECT - Held that: - From the description of work executed by the assessee in the Maneri Bhali Hydro-Electric Project, we note that it is in connection with construction of barage, intake sedimentation chamber etc. There is no doubt that such work has been carried out as part of the hydroelectric project and construction of dam therefore - these activities are in connection with the construction of the dam and hence excluded from the purview of Commercial or Industrial Construction”. With reference to the work executed by the assessee for Himachal Pradesh Electricity Board, such work involves construction of highway tunnel which is extension of existing highway tunnel. Construction of tunnel is specifically excluded from the purview of “Commercial and Industrial Construction - no service tax is liable for such construction activities. Business Support Services - certain amounts booked under “miscellaneous receipts” - Held that: - no documentary evidence was produced by the assessee but, assessee is in a position to provide copies of all the documents evidencing the fact that such miscellaneous receipts do not pertain to receipt of any consideration towards provision of any service - matter placed on remand for reconsideration. Decided partly in favor of assessee and part matter on remand. Issues:1. Service tax liability on construction services provided by the appellant.2. Classification of certain amounts recorded under 'miscellaneous receipts' for service tax purposes.Analysis:Issue 1: Service tax liability on construction services provided by the appellant- The dispute in the case involved the construction services provided by the appellant for specific projects, namely the Maneri Bhali Hydro-Electric Project and the project for Himachal Pradesh Electricity Board.- The Revenue proposed to charge service tax under the category of 'Commercial and Industrial Construction Services' for the activities carried out in these projects.- The appellant contended that the activities were related to the construction of a dam and a highway tunnel, which fall under exclusions provided in the Commercial and Industrial Construction Services category.- The adjudicating authority agreed with the appellant's argument and excluded the activities from service tax liability.- The Tribunal upheld the adjudicating authority's decision, stating that the activities were indeed related to the construction of a dam and a tunnel, which are excluded from the purview of Commercial and Industrial Construction Services.- Consequently, the Revenue's appeal was dismissed.Issue 2: Classification of amounts recorded under 'miscellaneous receipts' for service tax purposes- Another issue in the case pertained to certain amounts recorded by the appellant under 'miscellaneous receipts' in their book of accounts.- The Revenue contended that these amounts should be considered as received in connection with the provision of Business Support Services, leading to a demand for service tax.- The appellant argued that the miscellaneous receipts included various casual and non-recurring amounts, not related to Business Support Services.- The appellant had provided sample documents to the adjudicating authority to support their claim, but not all documents were submitted.- The Tribunal found that the matter required further examination and remanded it back to the adjudicating authority.- The Tribunal set aside the demand raised on the miscellaneous receipts and instructed the adjudicating authority to reconsider the matter after reviewing all documents submitted by the appellant.- The appellant's appeal was allowed by way of remand for a fresh assessment based on the complete set of documents.In conclusion, the Tribunal dismissed the Revenue's appeal regarding service tax liability on construction services and allowed the appellant's appeal on the classification of amounts under 'miscellaneous receipts' for a reexamination by the adjudicating authority.