Tribunal Rules No Service Tax on Composite Works Contracts Before 01.06.2007, Upholds Commissioner's Order.

The Tribunal dismissed the Revenue's appeal, upholding the Commissioner's order that service tax could not be levied on composite works contracts under 'Commercial and Industrial Construction Service' for the period prior to 01.06.2007. The Tribunal agreed with the respondent's argument, supported by Apex Court rulings, that such services were taxable only from 01.06.2007 under 'Works Contract Services.' The Tribunal found no error in the Commissioner's decision to drop the demand for the period before this date, affirming that the contracts were correctly classified.

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Issues involved:
The judgment involves the issue of demand of service tax under 'Commercial and Industrial Construction Service' for the period prior to 01.06.2007.

Summary of Judgment:

Issue 1: Demand of service tax under 'Commercial and Industrial Construction Service' for the period prior to 01.06.2007

The appeal was against the order confirming the demand of service tax under section 73 of the Finance Act for an amount and penalties imposed by the Commissioner. The respondent was providing taxable services under 'Commercial or Industrial Construction Services' and 'Works Contract Services'. The investigation revealed non-payment of service tax by contractors engaged by a company. The show cause notice demanded service tax for the period 2006-07 to 2010-11. The Commissioner dropped the demand for Works Contract Service before 01.06.2007, leading to the Revenue's appeal.

The Revenue argued that the order dropping the demand before 01.06.2007 was unsustainable, as the services were taxable from that date. They contended that the contracts were wrongly classified and should have been under Commercial and Industrial Construction Service. The respondent's services were deemed to be Works Contract Service, taxable from 01.06.2007, as per the law laid down by the Apex Court.

The Consultant for the respondent argued that the services fell under Works Contract Service, citing judgments by the Apex Court. The Tribunal noted that the issue was settled by the Apex Court, which held that Works Contract Service was taxable only from 01.06.2007. The Tribunal upheld the Commissioner's order, stating that the service tax could not be levied on composite works contracts prior to the introduction of the Finance Act, 2007.

In conclusion, the Tribunal found no infirmity in the Commissioner's order and dismissed the Revenue's appeal.

This summary provides a detailed overview of the judgment, highlighting the key issues, arguments presented by both parties, and the Tribunal's decision based on legal precedents.

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