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Appeal Allowed: Service Tax Demand Set Aside for Works Contract The Tribunal allowed the appeal, setting aside the demand for service tax under Erection Commissioning or Installation Services. The appellant's contract ...
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Appeal Allowed: Service Tax Demand Set Aside for Works Contract
The Tribunal allowed the appeal, setting aside the demand for service tax under Erection Commissioning or Installation Services. The appellant's contract encompassed both material supply and installation of a fire fighting system, constituting a works contract service. Relying on the precedent set by the Apex Court in CCE Vs. Larsen & Tourbo Ltd., the Tribunal deemed the appellant's position valid, leading to the unsustainable nature of the impugned order. As a result, the appeal was successful, and the order was pronounced in open court at the hearing's end.
Issues involved: 1. Demand of service tax under Erection Commissioning or Installation Services.
Analysis: The appeal was directed against Order-in-Appeal No. 06/2011 related to the demand of service tax under Erection Commissioning or Installation Services. The appellant had entered into a contract for the supply of labor and material along with the installation of a fire fighting system. The show cause notice was issued for the demand of service tax liability under the mentioned category. Both lower authorities held the appellant liable for paying the tax under Erection Commissioning and Installation Services.
The appellant argued that the entire agreement was for the supply of materials and erection, hence should be considered as a works contract service. Reference was made to the decision of the Apex Court in the case of CCE Vs. Larsen & Tourbo Ltd. The Departmental Representative contended that the appellant had only installed the fire fighting system and was correctly covered under Erection Commissioning & Installation Services.
Upon careful consideration of submissions and perusal of the show cause notice, it was found that the appellant had entered into a contract for the supply of material for the fire fighting system and its installation, which included Erection Commissioning and Installation services. The Tribunal held that the law as settled by the Hon’ble Apex Court in the Larsen & Tourbo Ltd. case would apply. Since the appellant had entered into an agreement for works contract service with no dispute, the impugned order was deemed unsustainable and set aside. Consequently, the appeal was allowed. The operative part of the order was pronounced in open court at the conclusion of the hearing.
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