Appellate Tribunal sets aside service tax demand, classifies services as works contract, granting relief to appellant.

The Appellate Tribunal allowed the appeal, setting aside the order confirming the service tax demand under commercial and residential services. The Tribunal found merit in the appellant's argument that the services provided should be classified as "works contract service" due to the payment of VAT on materials and no demand raised under this category post a specific date. Consequently, the appellant was not liable to pay service tax under the previous categories, leading to the appeal being allowed with consequential relief.

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Issues involved:
The judgment involves the confirmation of service tax demand under commercial or industrial construction services and construction of residential complex services during a specific period, along with the classification of services rendered by the appellant.

Confirmation of Service Tax Demand:
The appellant appealed against an order confirming the demand of service tax under commercial or industrial construction services and construction of residential complex services for a particular period. The appellant was engaged in construction of commercial and civil structures, and a show-cause notice was issued alleging non-payment of service tax without obtaining registration. The appellant contested the notice, claiming entitlement to abatement under specific notifications. However, the demand of service tax was confirmed, leading to the appeal.

Classification of Services Rendered:
The appellant argued that the services provided, along with free supply materials, should be classified as "works contract service" instead of commercial or industrial construction services or construction of residential complex services. The appellant contended that they had paid VAT on materials supplied and should not be liable for service tax under the mentioned categories. Referring to a previous Tribunal decision and the Hon'ble Apex Court's observation, the appellant asserted that works contract service came into the service tax net from a certain date, and no demand had been raised against them under this classification post that date. Consequently, the appellant claimed they were not liable to pay service tax under the previous categories.

Conclusion:
The Appellate Tribunal, after considering the submissions from both parties, found merit in the appellant's argument regarding the classification of services as "works contract service." It noted that the appellant had paid VAT on materials and that no demand had been raised against them under the works contract service category post a specific date. Therefore, the impugned order confirming the service tax demand under commercial and residential services was set aside, and the appeal was allowed with consequential relief.

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