Appellant not liable for service tax on construction services under works contract service; appeal allowed

The Tribunal found that no service tax was payable by the appellant for construction services provided, as the activity fell under works contract service due to the supply of material along with the service. The impugned order demanding service tax was set aside, and the appeal was allowed with consequential relief.

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Issues:
Appeal against demand of service tax under construction service.

Analysis:
The appellant appealed against an order demanding service tax for construction services provided to a company. A show cause notice was issued, and the demand was confirmed against the appellant. The appellant challenged this order. Despite the appellant's absence and no request for adjournment, the appeal was taken up for final disposal. The appellant had been paying VAT during the period in question for the activity undertaken. Referring to a Supreme Court decision, it was established that if material is supplied along with the service in construction activities, the classification is under works contract service, and no service tax is payable before a certain date. Since the appellant supplied material along with the service, it was classified under works contract service, and no service tax was payable by the appellant before the specified date.

The Tribunal found that no service tax was payable by the appellant, and therefore, set aside the impugned order. The appeal was allowed with consequential relief. The operative part of the order was pronounced in the open court.

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