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Issues: (i) Whether the supply and laying of ready-mix concrete at the buyer's site was classifiable as works contract service and liable to service tax. (ii) Whether the demand on renting of tangible goods survived in view of the small-scale service provider exemption. (iii) Whether the demand on legal services under reverse charge was barred by limitation.
Issue (i): Whether the supply and laying of ready-mix concrete at the buyer's site was classifiable as works contract service and liable to service tax.
Analysis: The activity was held to be the manufacture and sale of ready-mix concrete, with pumping, pouring and laying at site being incidental to the nature of the product. The value of these activities was already included in the excisable value on which central excise duty had been paid. The contractual description as works contract could not override the actual character of the transaction, and the statutory definition of works contract did not extend to the manufacture and sale of ready-mix concrete in the facts of the case.
Conclusion: The demand of service tax under works contract service was not sustainable and was set aside.
Issue (ii): Whether the demand on renting of tangible goods survived in view of the small-scale service provider exemption.
Analysis: The turnover reflected for the relevant year was within the exemption limit available under the small-scale service provider notification. On the figures accepted in the record, the service value did not cross the threshold prescribed for taxation.
Conclusion: The demand on renting of tangible goods was not sustainable and was set aside.
Issue (iii): Whether the demand on legal services under reverse charge was barred by limitation.
Analysis: The demand was challenged on limitation, supported by the departmental audit record covering the relevant period. The time-bar objection was accepted.
Conclusion: The demand on legal services under reverse charge was time-barred and was set aside.
Final Conclusion: The impugned order could not be sustained, and the assessee was granted relief on all contested demands.
Ratio Decidendi: Where a transaction is in substance the manufacture and sale of goods and the value of incidental site activities is already included in the excisable assessable value, it cannot be recharacterised as works contract service for service tax purposes merely because the contract uses that description.
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