Tribunal exempts individual from service tax before 04/30/2006; liability starts 05/01/2006 due to definition change. Penalties waived.

The Tribunal set aside the demand for service tax for the period up to 30.04.2006, ruling that the appellant, as an individual, was not considered a "commercial concern" before that date. However, from 01.05.2006 onwards, the appellant was found liable for service tax due to an amendment in the construction service definition. Despite the appellant's failure to register or file returns, the Tribunal waived penalties as the service tax had been paid before the Show Cause Notice was issued. The appeal was allowed with consequential reliefs.

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Issues:
Challenge to Order-in-Appeal dated 24.02.2010 regarding demand of service tax for the period 2004-05 to 2006-07. Appellant's liability as an individual for construction services provided. Justification of invoking extended period of limitation under Section 73. Appellant's payment of service tax before issuance of SCN.

Analysis:

1. Applicability of Construction Service Definition:
The appellant contested the demand of service tax, arguing that as an individual service provider, they did not fall under the definition of a "commercial concern" before 01.05.2006. This argument was supported by Circulars issued by the CBEC. The Tribunal acknowledged that the appellant, being an individual, was not covered under the definition of a "commercial concern" until 01.05.2006. Therefore, the levy of service tax for the period up to 30.04.2006 was set aside.

2. Liability Post-Amendment of Definition:
From 01.05.2006, the definition of construction service was amended to include "any person." Consequently, the appellant became liable for service tax from this date onwards. The Tribunal noted that the appellant had failed to register or file statutory returns, justifying the Revenue's invocation of the extended period of limitation under Section 73. Therefore, the demand for service tax from 01.05.2006 was upheld.

3. Payment of Service Tax and Penalties:
It was observed that the appellant had already paid the service tax along with interest before the issuance of the Show Cause Notice (SCN) dated 19.11.2007. As a result, the Tribunal deemed the imposition of penalties unjustified. Citing Section 80 of the Finance Act, 1994, the Tribunal waived the penalties, considering it a fit case for such action.

In conclusion, the Tribunal set aside the demand for service tax up to 30.04.2006 but upheld it from 01.05.2006 onwards. Additionally, the penalties were waived, and the appeal was allowed with any consequential reliefs.

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