Tribunal rules in favor of appellant, partially allowing appeal against service tax demand. The Tribunal set aside the service tax demand for dredging service and Commercial or Industrial Construction Service but confirmed the demand for ...
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Tribunal rules in favor of appellant, partially allowing appeal against service tax demand.
The Tribunal set aside the service tax demand for dredging service and Commercial or Industrial Construction Service but confirmed the demand for consulting engineer service, transport of goods by road services, and consulting engineer's services (import of services). Penalties imposed were set aside due to reasonable cause for non-payment of service tax. The appeal was partly allowed in favor of the appellant, with the Tribunal's order pronounced on 08.05.2023.
Issues involved: Determination of service tax liability on Commercial or Industrial Construction Service, Construction of Complex Service, Consulting Engineer Service, and Goods Transfer Agency Service.
Regarding dredging service: The appellants were awarded a contract for construction work involving supply of goods before the effective date of works contract service taxation. Citing the Supreme Court judgment, the Tribunal held that service tax demand for this service cannot be sustained.
Regarding consulting engineer service: The demand confirmed for this service was found sustainable as the appellants did not contest it during adjudication.
Regarding Commercial and Industrial Construction Service: The service provided involved both execution of work and supply of material, which was procured by the appellants on payment of VAT. The Tribunal categorized this service as works contract service and held that no service tax demand can be imposed as it was provided before the relevant taxation period.
Regarding Consulting Engineer Service and Goods Transfer Agency Service: The appellants did not contest the demands for these services but argued against the imposition of penalties. The Tribunal found ambiguity regarding payment of service tax by the recipient under reverse charge mechanism and set aside the penalties imposed.
Disposition: The Tribunal set aside the service tax demand for dredging service and Commercial or Industrial Construction Service but confirmed the demand for consulting engineer service, transport of goods by road services, and consulting engineer's services (import of services). The penalties imposed were set aside due to reasonable cause for non-payment of service tax.
Conclusion: The appeal was partly allowed in favor of the appellant, with the Tribunal pronouncing the order on 08.05.2023.
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